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Mutual Funds

A i l t l t hi fi i l lA i l t l t hi fi i l l

Fortune Equity Brokers (India) Ltd.

A simple tool to achieve financial goals..A simple tool to achieve financial goals..

Wh t i M t l F d ? Wh t i M t l F d ? What is Mutual Funds ? What is Mutual Funds ?

Pools money with

Passed back to

Fund House

Investor

Fund Managers

Returns =g

invest inGenerates


Capital Market

Types of Mutual Funds

By Investment Objectives By Constitution

Equity Hybrid Debt Others Open End IntervalClosed

End

Diversified Fund

ELSS (Tax Equity Oriented

Liquid Funds

Floating Rate Funds Gold ETFs(Saving)

Sectoral Funds

Index Funds

ETFs

Debt Oriented

Monthly Income Plans (MIPs)

Funds

Income Funds

Gilt Funds

Fixed Maturity Plans (FMPs)

Arbitrage Funds

Fund of Funds


ETFs

Mutual Funds Mutual Funds Risk / ReturnRisk / Return

Hybrid & MIPDebt

< Sectoral FundsEquity

Re

turn

>

Arbitrage Funds

Balanced Funds>>

Low Med High

>> Risk > Risk

Indian Mutual Fund Industry y


Industry Industry Growth Growth -- AUMAUM

Asset Under Management (AUM)

In the last 10 years, AUM has

grown by 22.70% CAGR


Source: AMFI

Worldwide Mutual Fund Assets Worldwide Mutual Fund Assets 30 00

25.77 26.13 24.78 24.6321.64

18.9218.16

20.3422.38 22.95 23.02 21.44

23.07

20.00

25.00

30.00

10.00

15.00

5.00

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

(trillions of U.S. dollars, end of quarter)

2007 2008 2009 2010


Source: Investment Company Institute

MF I d t MF I d t AUM C itiAUM C itiMF Industry MF Industry AUM CompositionAUM Composition

Indian MF Industry World-wide

71.0%

63.0%

60.0%

70.0%

80.0%

Indian MF Industry

41% 40%40%

45%

World-wide

46.5%

29.8%25.7%

33.0%

23 7%30.0%

40.0%

50.0%

60.0%

19%20%

25%

30%

35%

23.7%

3.3% 4.0%

0.0%

10.0%

20.0%

0%

5%

10%

15%

Mar-00 Mar-05 Mar-11

Debt Equity Hybrid/ Others

Sep-10Rs.113,005AUM Rs.149,600 Rs.700,538 USD 23.07 trillion


Source: AMFI & Investment Company Institute

Worldwide Mutual Fund Assets by Worldwide Mutual Fund Assets by yyRegionRegion

Americas;

54%Europe; 33%

Country 2000 2010;Q3 CAGR %

World 11,871 23,696 7.55%

United States 6,965 11,267 5.19%

Africa

France 722 1,669 9.22%

Luxembourg 747 2,438 13.26%

Japan 432 749 5.96%Africa and

Asia / Pacific; 13%

p

India 13.5 123 26.22%

Brazil 149 923 21.20%

R i 0 177 3 508 36 94%

Indias share to World MF AUM = 0.52%

Russia 0.177 3.508 36.94%

( Figures in USD billion)


Source: Investment Company Institute

Indian MF Industry StatisticsIndian MF Industry StatisticsNumber of AMCs: 43Number of AMCs: 43

Number of Schemes in India: 1,413Asset Class No. of Schemes Total Net Assets (Cr.)( )

Debt 848 410,453

Equity 416 199,773

Hybrid 149 59,641Hybrid 149 59,641

Grand Total 1,413 669,868

many schemes are in pipeline ..many schemes are in pipeline.. Number of Schemes in the World:68,863(There are more than 17,600 schemes in US and more than 35,000 schemes inEurope)


Source: Accordfintech; Investment Company Institute

India India -- Category wise breakCategory wise break--upup

Equity Equity No. of

SchemesTotal Net

Assets (Cr.) DebtDebtNo. of

SchemesTotal Net

Assets (Cr.)q yq y ( )Diversified Equity Funds 241 145,625

Index Funds 32 1,483

ETFs Equity 16 1,459

( )Liquid Funds 112 234,841

Floating Rate Funds 17 7,283

FOF - Debt Oriented 14 737

Tax Saving Plans / ELSS 45 23,369

FOF - Equity Oriented 28 4,036

Sectoral Funds54 23,801

Gilt Funds 64 4,283

Income Funds 115 50,347Fixed Maturity Plans (FMPs) & Interval Plans 526 112,963

Grand Total416 199,773 Grand Total 848 410,454

HybridHybrid No. of Schemes Total Net Assets (Cr.)Arbitrage Funds 17 4,163Balanced Funds 48 19,898Capital Protection 20 3,079FOF Hybrid 3 160Monthly Income Plans (MIPs) 53 29,557ETFs Gold 8 2,783


Grand Total 149 59,641

Source: Accordfintech

Top 10 AMCs by AUMTop 10 AMCs by AUMRank Mutual Fund Name Average AUM (Rs Crs)Rank Mutual Fund Name Average AUM (Rs. Crs)

1 RelianceMutualFund 101,5772 HDFCMutualFund 86,2823 ICICI Prudential Mutual Fund 73 4663 ICICIPrudentialMutualFund 73,4664 UTIMutualFund 67,1895 BirlaSunLifeMutualFund 63,6966 SBIMutualFund 41,6727 FranklinTempletonMutualFund 37,8838 KotakMahindraMutualFund 32,2029 DSPBlackRockMutualFund 30,601

l d10 TataMutualFund 22,681Average AUM as on 31 March, 2011

Top 5 AMCs constitute 56% of the AUM, whereas top 10 AMCsconstitute nearly 80% of the Industry AUM


Source: AMFI

constitute nearly 80% of the Industry AUM.

Mutual Fund Performance


Fund Performance Fund Performance -- Equity Equity Absolute Return C d A li d %

Categories No. of FundsNet Assets (Rs. Crs)

Absolute Return % Compound Annualized %

YTD 1 Year 2 Year 3 year 5 Year 7 Year

Diversified-Large cap 52 45,999 -6.73 9.19 32.87 6.67 9.55 19.74

Diversified-Small-Mid cap 50 33,875 -7.48 5.83 45.04 6.01 8.05 21.12

Diversified Multi Cap 110 54,539 -6.57 8.28 35.04 5.78 8.66 19.59

ETFs Equity 16 1,900 -5.23 15.33 39.00 13.59 13.20 18.67

Tax Saving Plans / ELSS 45 23,531 -6.83 7.75 35.28 6.20 7.95 18.47Tax Saving Plans / ELSS 45 23,531 6.83 7.75 35.28 6.20 7.95 18.47

FOF - Equity Oriented 11 1,451 -3.41 8.79 28.34 9.58 10.90 17.66

FOF Overseas 17 2,589 0.07 16.01 27.51 1.37 6.86 9.12

Index Nifty 22 1,080 -6.55 10.24 28.90 4.98 9.20 16.54

I d S 10 400 6 59 10 85 31 75 5 40 9 06 17 36Index - Sensex 10 400 -6.59 10.85 31.75 5.40 9.06 17.36

BSE MIDCAP -8.47 2.74 43.27 1.47 5.09 17.79

BSE SENSEX -6.76 9.89 31.61 5.07 9.95 18.57

S&P CNX Nifty -6.42 10.32 30.15 5.00 10.17 17.61


Returns are as on 19 April 2011

Fund Performance Fund Performance -- Equity Equity Absolute Return Compound Annualized %

Categories No. of FundsCategory

Net Assets% Compound Annualized %

YTD 1 Year 2 Year 3 year 5 Year 7 Year

Sector-Banks 6 2,496 -1.35 28.06 53.56 23.38 25.87 28.08

Sector-Energy 4 5,284 -10.24 -6.52 22.94 0.39 19.10 --

Sector-FMCG 2 119 -1.03 25.10 41.62 15.33 11.35 25.80

Sector-Infrastructure 23 14,866 -8.29 -2.62 28.60 0.99 9.21 18.41

Sector-Media 2 134 -7.94 -4.65 27.17 -1.55 6.87 --

Sector-Pharma 4 830 -5.38 14.72 54.60 23.53 12.71 20.43

Sector-Service 4 713 -7.12 4.51 36.29 3.58 6.87 --

Sector-TECk 4 398 -10.85 8.27 50.80 7.91 8.48 19.12

BSE MIDCAP -8.47 2.74 43.27 1.47 5.09 17.79

BSE SENSEX -6.76 9.89 31.61 5.07 9.95 18.57

S&P CNX Nifty -6.42 10.32 30.15 5.00 10.17 17.61



Fund Performance Fund Performance -- Hybrid Hybrid Absolute Returns % Compound Annualized %

Categories No. of FundsNet Assets

Rs. Crs.

Absolute Returns % Compound Annualized %

YTD 6 Month 1 Year 2 Year 3 year 5 Year

Arbitrage- Equity Oriented 16 830 6.67 7.74 7.14 6.76 6.15 6.97

Arbitrage- Debt Oriented 1 3 270 8 27 7 85 6 83 5 60 6 02 7 00Arbitrage- Debt Oriented 1 3,270 8.27 7.85 6.83 5.60 6.02 7.00

Balanced- Debt Oriented 14 7,661 -2.03 -7.65 2.06 11.81 5.22 2.86

Balanced- Equity Oriented 34 11,987 -13.92 -8.84 8.07 27.43 7.45 9.33

Capital Protection 20 3,082 1.25 1.46 4.38 8.16 6.25 --20 3,082 1.25 1.46 4.38 8.16 6.25

FOF Hybrid 3 160 -3.29 -0.45 6.79 20.95 11.95 11.94

Monthly Income Plans (MIPs) 53 29,564 2.45 2.97 5.77 9.59 7.48 7.40

Crisil Balanced Fund Index -12.40 -4.33 8.76 21.17 6.68 9.79


Crisil MIP Blended Index 1.45 3.23 6.11 8.09 6.60 7.16


Fund Performance Fund Performance -- DebtDebtNo of Net Assets

Annualised Returns % Compound Annualized (%)Categories No. of Funds

Net Assets Rs. Crs.

(%)

1 Month 3 Month6 Month 1 Year 2 Year 3 Year

Liquid Funds 52 124,291 8.14 7.79 7.34 6.24 5.01 5.90

Ultra Short Term Funds 60 101,777 8.93 8.24 7.44 6.32 5.47 6.34Ultra Short Term Funds 60 101,777 8.93 8.24 7.44 6.32 5.47 6.34

Floating rate Funds - Long Term 7 3,439 9.12 8.54 7.43 6.18 5.73 6.64

Floating rate Funds - Short Term 10 3,466 9.58 8.58 7.81 6.61 5.59 6.57

FOF - Debt Oriented 14 737 22.39 6.65 2.67 5.93 11.02 7.16

Gilt Funds - Long Term 43 3,550 3.05 6.58 6.08 4.96 2.68 6.74g ,

Gilt Funds - Medium Term 3 3 3.95 8.64 6.60 6.19 6.17 7.75

Gilt Funds - Short Term 18 564 4.46 6.13 5.53 4.95 3.49 5.12

Income Funds - Long Term 53 19,318 8.94 7.67 6.72 5.63 4.55 6.94

Income Funds - Medium Term 13 5,661 10.88 8.52 6.80 5.42 4.22 4.44,

Income Funds - Short Term 49 24,469 10.25 8.94 7.22 6.06 5.60 7.44

Fixed Maturity Plans (FMPs) 518 109,718 11.93 8.90 6.63 6.58 11.60 5.79

Crisil Composite Bond Fund Index 6.36 7.48 5.37 5.17 4.16 6.08

Crisil Liquid Fund Index 7.81 7.97 7.59 6.41 4.82 6.15


Returns are as on 19 April 2011Crisil Short-Term Bond Fund Index 9.94 8.00 6.21 5.40 4.94 6.90

Fund Performance Fund Performance -- AnalysisAnalysis

Sensex: Performance since lowest level till nowSensex: Performance since lowest level till now

09 March 2009 19 April 2011 Abs. Returns %

8 160 19 122 134%8,160 19,122 134%

There are 397 equity funds in existence since 09 March 2009

190 funds out-performed Sensex i.e. ~ 48% funds

336 funds offered more than 100% returns i.e. ~ 84% funds

273% is the highest return earned by DSP BR MicroCap Fund

43% is the lowest return earned by Birla SL CEF-Global Prec Metal


y

Fund Performance Fund Performance -- AnalysisAnalysis

Sensex: Performance since previous all time high level till nowSensex: Performance since previous all time high level till now

08 Jan 2008 19 April 2011 Abs. Returns %

20 873 19 122 8 39%20,873 19,122 -8.39%

There are 318 equity funds in existence since 08 Jan 2008

150 funds out-performed Sensex i.e. ~ 47% funds

100 funds offered positive returns i.e. ~ 31% funds

107% is the highest return earned by Franklin Pharma Fund

-65% is the lowest return earned by JM Basic Fund


y

How do I do How do I do Investment Investment Planning?Planning?Planning?Planning?

SStart earlytart earlySS a ea ya ea yIInvest regularlynvest regularlyg yg yPPlan for the futurelan for the future


PPlan for the futurelan for the future

SStart Earlytart EarlySStart Earlytart EarlyStart Investing at age 50yrs 45 yrs 40 yrs 35 yrs 30 yrs 25 yrs

M thl I t t R 5 000Monthly Investment Rs 5,000

Stop Investing at age 60 yrs

Investment Period 10 yrs 15 yrs 20 yrs 25 yrs 30 yrs 35 yrs

Total Investment (Rs)

6.0 lacs 9.0 lacs 12.0 lacs 15.0 lacs 18.0 lacs 21.0 lacs

C t V l (R )1.77 3.25 94.9 50.0 25.2 11.6

Current Value (Rs) crores crores

* Assumes compounded annual returns of 12% over the entire period

R 2 30 !

lacs lacs lacs lacs

the sooner you start, makes a difference!

Difference in returns is almost Rs 2.30 crores! (Investmentamount difference is just Rs. 6 lakhs)


The Power of Compounding is the Eighth Wonder of The World Albert Einstein

II l ll lIInvest Regularlynvest RegularlyInculcate a HABIT to SAVE a certain sum of money each monthy

It is very easy to spend WEALTH, but very difficult to SAVE

We EARN regularly We SPENDregularly

So should we not INVEST

WWeekend tripsEEntertainmentAApparels

regularly?AApparelsLLeisure TTickets - movieHHolidaying


Time in the market is more important than timing the market.- Warren Buffett

PPl f th F tl f th F tA proper planning is required for accomplishing future financial goals

PPlan for the Futurelan for the FutureA proper planning is required for accomplishing future financial goals..

RetirementHousing Children's Education

Childrens Marriage

Dream Car Holiday Abroad


Plan for the future because thats where youre going to be spending the rest of your life - Mark Twain

Systematic Investment Plan (SIP)Systematic Investment Plan (SIP)

It is a method of investing a fixed sum, at a regular interval,in a mutual fund. It is very similar to monthly savingschemes like a recurring monthly deposit / post officed itdepositConvenience Direct-debit option available. Flexibility Start for amount as low as Rs 500 Continue for as long as you want Monthly or Quarterly Option Choice of dates (i.e. 1st/7th/10th/15th/25th etc.) Choice of Tenure (ideal period 10 years)


SIP Performance of Rs 10,000 per monthSIP Performance of Rs 10,000 per monthSIP Performance of Rs 10,000 per monthSIP Performance of Rs 10,000 per month

10 years 15 years

T t l I t t R 12 l kh R 18 l khTotal Investment Rs 12 lakhs Rs 18 lakhs

Scheme Name Present Value

(Rs lakhs)

XIRR (%) Present Value

(Rs lakhs)

XIRR (%)

(Rs. lakhs) (Rs. lakhs)

Reliance Growth Fund75.62 35.03 % 257.72 31.43 %

HDFC Equity Fund 62.97 31.59 % 242.84 30.75 %

Franklin India Prima Plus Fund49.26 26.98 % 175.71 27.08 %

Franklin India Bluechip Fund48.99 26.88 % 121.09 22.91 %

# SIP Returns as on 19 April 2011

Additional Investment of Rs 6 lakhs over 5 yrs; is worth Rs 1.82 crores


the sooner you start, makes a difference!

Demystifying NAV Demystifying NAV Net Asset ValueNet Asset ValueDemystifying NAV Demystifying NAV Net Asset ValueNet Asset ValueWhile selecting a fund, the size of the NAV should not be the criteria, A low NAV need not mean that its a good buy ...

Scheme Name NAV's on Return %

09 Mar, 2009 19 Apr, 20110

Religare AGILE 3.97 6.77 70.53%

LIC Nomura MF Top 100 4.56 8.25 80.69%

HSBC Dynamic 5.77 10.38 79.80%

HSBC Midcap Equity 9.00 21.09 134.16%

Reliance Banking 30.07 108.87 262.07%

HDFC TaxSaver 83.66 234.86 180.74%

HDFC Equity 91.23 282.99 210.21%

Reliance Growth 183.38 464.96 153.55%

Clearly the data suggests that there is no correlation between the NAV size and


Clearly the data suggests that there is no correlation between the NAV size andthe returns.

T i f M l F dT i f M l F dTaxation of Mutual FundsTaxation of Mutual FundsIn mutual funds there are two sources of Income:1. Capital Appreciation: Capital Gain Tax is applicable

You can make a profit by selling the units at a price higher than at which you bought

2. Income Distribution: Dividend Distribution Tax

Dividend Distribution Tax Capital Gains

Individual Corporate Short Term$ Long Term

The fund distributes part of the appreciation to the investors as dividend

Money Market

27.68% (25% + Surcharge & Edu Cess)

27.68% (25% + Surcharge & Edu Cess)

As per Applicable Tax Slab

20%# (with indexation) or 10%#,

hi h i Debt 13 84% 22 15% whichever is lower

Debt Oriented

13.84% (12.5% + Surcharge & Edu Cess)

22.15%(12.5% + Surcharge & Edu Cess)

Equity oriented*

Nil Nil 15%# Nil


oriented

* Implies >65% exposure to equity$ Period of holding less than one year

Contact DetailsContact DetailsContact DetailsContact DetailsKiran Nate - Analyst Mutual FundsT l 91 22 4027 3422 (Di ) M b 98208 39890Tel: +91 22-4027 3422 (Dir), Mob: 98208 39890(E) [email protected] (W) http://www.ffsil.com

In case you have any operational query, please feel free to contact our MF back ffi t office team:

Manohar RautTel: +91 22-4027 3733 (Dir), (E): [email protected] d P tilSandeep PatilTel: +91 22-4027 3642 (Dir), (E): [email protected] WadkarTel: +91 22-4027 3734 (Dir) (E): manisha@ffsil com

Fortune Group2nd Floor K K Chambers Sir P T Marg Fort Mumbai 400 001

Tel: +91 22 4027 3734 (Dir), (E): [email protected]


2nd Floor, K K Chambers, Sir P T Marg, Fort, Mumbai, 400 001.

DisclaimerDisclaimerDisclaimerDisclaimerRisk Factors: Mutual funds, like securities investments, are subject to market risksand there is no guarantee against loss in the schemes or that the schemes objectiveswill be achieved. As with any investment in securities, the NAV of the units issuedunder the schemes can go up or down depending on various factors and forcesaffecting capital markets. Past performance of the Sponsor /the AMC/the MutualFund does not indicate the future performance of the schemes. Please read thescheme information documents of the scheme and the statement of additionalinformation before investing.


presentation on mutual funds.ppt - fortune equity … of mutual funds by investment objectives by...

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