According to AMFI
the moneypooled in by a large number of investors is what
makes up a MutualFund. This money is then managed by a
professional Fund Manager, whouses his investment
management skills to invest it in variousfinancial instruments.
According to SEBI Act, 1993
Mutual fund means a fund established in the form of a trust by
a sponsor to raise money by trustee through the sales of units
to the public under one or more schemes for investing in
securities in accordance with these regulations.
Evolution
First phase 1964- 1987
Second Phase 1987-1993 (Entry of public
sector funds)
Third phase 1993-2003 ( Entry of private
sector funds)
Fourth Phase since February 2003
Organisations
1.Sponsor
Any person who acting alone or with another
body corporate establishes a mutual fund
SEBI registers mutual fund if following criteria
are satisfied(I)Sponsor should have been doing business in
financial services for not less than five years,
with positive net worth in all immediately
preceding 5 years
(II) The sponsor and any of the directors or
principle officers to be employed by the mutual
fund, should not have been found guilty any
moral turpitude or economic offences.
2. Trustees
Mutual fund in India is constituted in the
form of a public trust created under the
Indian Trusts Act, 1882
The sponsor forms the trust and register
with SEBI
At least 50% of the trustees shall be
independent trustees
3. Asset Management
Company
AMC is a company formed and registered
under the Companies Act, 1956
Acts as the investor manager to the Trust
under the supervision and direction of the
Trustees
AMC of a mutual fund must have a net
worth of at least 10 Crore at all times and
this net worth should be in the form of cash
Ex.- UTI Asset Management, Franklin
Templeton etc.
2. Net Assets
Current value of the portfolio securities
held by a scheme
Total Assets of the scheme - fees and
expenses
It will go up whenever investors buy
additional units in the scheme or brings
in funds
It is not a fixed value
10000
10
120000
10000
12
108000
9000
12
100000
9000
11.11
111110
1000
11.11
Transaction/ Information
Period
2. Debt Funds
Short term debt funds
Long term debt funds
3. Hybrid Funds
Debt oriented Funds
Equity oriented Funds
Asset Allocation Funds
Capital Protection Funds
4. Other Funds
Fund of funds
Exchange traded funds
Gold ETFs
International Funds
Real Estate Mutual Funds
Rajiv Gandhi Equity Saving Scheme
Infrastructure Debt Schemes
Domestic
Companies
NRI
Nil
Nil
Nil
Liquid and
25%
Money Market
Schemes
30%
25%
Other Debt
Funds
30%
25%
Equity
Oriented
Schemes
25%
Domestic
Companies
NRI
LTCG
Nil
Nil
Nil
STCG
15%
15%
15%
LTCG
20% with
indexation
20% with
indexation
20% with
indexation
STCG
Marginal Rate
of taxation
Marginal Rate
of taxation
Marginal Rate
of taxation
Equity
Oriented
Schemes
Non-Equity
Oriented
Schemes