18054216 prudential icici mutual fund

7/31/2019 18054216 Prudential Icici Mutual Fund

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PRUDENTIALICICI MUTUAL

FUND


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Definition:

A MF is a pool of money, collected from investors ,& is investedaccording to certain Investment Options

Characteristics of a MF :

1) Ownership of MF belongs to investors

2) MF is managed by investment professionals who earn a feefor their services from the fund

3) Pool of funds is invested in a portfolio of marketable

investments. Value of portfolio is updated every day


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Why Mutual Funds

To address problems faced by retail investors;

Lack of moneyto obtain spread

Lack of personal expertise

Lack oftimeto manage investments


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Structure of MFs

Governed by SEBI (Mutual Fund) Regulations, 1996 Mandatory for MFs to have a three tier structure

Sponsor: Promoter of the MF, appoints the Trustees

Trustees:Responsible to the Investors in the MF,appoints AMC

AMC : Business face of MF, manages affairs of MF

Sponsor TrusteeAsset Management

Company


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How Mutual Funds Work

Money Pooled from Investors

Unit Trust Fund/ Mutual Fund

Trustee*A

Portfolio of Authorised Investments

Shares Government Securities Bonds Property Liquid Assets Derivatives

Professional FundManager

Trust Deed

A: Custodian/Depository


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Mutual Funds: Advantages

Lower transaction costs due to economies of scale

Tax benefit compared to most other investment options in India

Professional fund management

Diversification

Systematic Investment Plans

Regular Savings Plans


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Mutual Funds - Types

Open-ended:

Investors can buy /sell units of fund,at NAV related prices,atany time directly from the fund.

These funds are offered for sale at a pre-specified price,sayRs. 10 ,in the initial offer period. After a pre-specified period,

say 30 days,the fund is declared opened for further sales &repurchases

Pool of funds & units vary everyday

Close-ended:

Open for sale to investors for a specified period ,after whichfurther sales are closed. Any further transaction happens inthe secondary market where closed end funds are listed

Pool of Funds technicallyconstant


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Advantages of Mutual Funds

Suit small or large investors.

Flexibility - option to have Income Reinvested.

Professional Fund Management.

Cheaper dealing than for individual.

Liquidity ease of purchase and sale of holdings

Diversification spread of risk.

Access to international markets

Tax benefits in some jurisdictions.

Regulated - investor protection.

Wide spectrum of fund choice 50,000 funds worldwide.


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Investment Pyramid: India

Liquid Funds

Short term funds

Income Funds

Equity FundsReward

Risk

Floating rate Funds


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Investment objective

Each fund :

Stated Investment Objective

Income / Growth

Markets(s)

Government SecuritiesMoney Markets

Europe / USABlue ChipsGlobal

Europe / USASmaller Cos.

Emerging MarketsDerivatives

Reward

Risk


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Applications of Mutual Funds

Any mediumto long-terminvestment i.e. >3 years

Investment Abroad

exposure to overseasmarkets - appeals to bothsophisticated and unsophisticated investors

Retirement Income Invest whileemployed- take income in retirement/ use

capital as safety net.


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Applications of Mutual Funds

Achievement of long-term goals

Housing

Education

Investment for children

Parents / Grandparents set up investment account on

behalfof children / grandchildren.

Unit-Linked Life AssuranceProducts.


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Regulatory Authority

Securities Exchange Board of India

Authorisation process

Submit :

Trust deed (Unit Trust)

Instrument of Incorporation (Investment Company)

Prospectus (or equivalent) Marketing Plan

Evidence of financial standing

Submission Fee

Formal request


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Offer Document

Details of launche.g.

length of initial offer period

what will happen if launch targetsnotreached.

Legal Document in language of country

Purpose

Provide Investors with key informationneeded to make informed decisions

MFs are required to file with a SEBI the Offer Document/Prospectus,in a prescribed format that provides all information about the fund &

the scheme


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Offer Document / Prospectus

Constitution of the fund,details of sponsor, trustee & AMC

Standard & Specific risk factors

Scheme attributes -Investment objective,pattern,terms withregards to liquidity

Details of the scheme being offered

Loads, fee structures & expenses

Unit holder rights


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Key Information Memorandum

As the Offer document is very detailed, SEBI allowsMFs to summarize the key points in a summarydocument called as the Key Information Memorandum

(KIM) It is mandatory that the KIM is made available to all

investors alongwith the application forms


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Initial offer at fixedprice

Pressannouncements /Mailingsto potential investors- must conform to regulatory standards of jurisdiction.

Launchbriefingsto advisers/agents.

Some jurisdictions allow direct selling

off the page

.

Usually, fundholdssubscriptions to see how muchraised before investing.

Launching a Mutual fund

18054216 prudential icici mutual fund

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