mutual fund ppt04.pptx

7/28/2019 mutual fund ppt04.pptx

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PART 2By:-Brijesh lakho


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MONEY MARKET MUTUAL FUNDS (MMMF)

the Reserve Bank of India (RBI) permitted the

establishment of the Money Market Mutual Funds

(MMMF) in the year 1992.

The basic idea is the deployment of mutual funds'

surplus funds in the money market.

MMMF ensures high liquidity, adequate surety and

high returns.


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RBI GUIDELINES (23.11.1995)

MMMFs can be launched by banks, public financial

institutions and private sector MFs.

Units of MMMF can be issued to individuals only.

No minimum return can be assured by the MMMF Minimum lock-in period is 15 days


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MMMF can be set up with the approval of the RBI

only while private sector ones with the approval of

the SEBI.

Shares and units issued by the MMMF are subject

to stamp duty.

Funds received by the MMMF can be invested only

in Treasury Bills, Government of India securities

dated with an unexpired maturity up to one year,

call loans to banks, CDs and CPs.


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MMMF should have a minimum investment of 25

per cent in the Treasury Bills and dated government

securities minimum investment in call loans 30%,

commercial bills 20% and CPS 15% (maximum

exposure to a single company cannot be more than3 per cent).

RBI announced on 22-10-1997 that they can invest

in rated corporate bonds and debentures, with

residual maturity of up to one year.


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UTI'S MONEY MARKET MUTUAL FUND (23.4.1997)

The Unit Trust of India (UTI) launched its Maiden

Money Market Mutual fund (MMMF) on 23.4.1997.

The minimum subscription amount has been

pegged at Rs.10,000.

The fund comes without a sale and redemption load

with a nominal fee of Rs.20 charged for redemption

transactions according to the RBI guidelines.


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UTI'S MONEY MARKET MUTUAL FUND (23.4.1997)

MMMF can invest in money market instruments, but

it has to have a lock-in period of 30 days.

This is done to prevent competition to bank

deposits.


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COLLECTIVE INVESTMENT SCHEMES (CIS)

Under the SEBI Act and Regulations, no person

can carry on any CIS unless he obtains a certificate

of registration from SEBI.

All existing collective investment schemes were

required to apply for registration by December

14,1999.

An existing scheme which does not obtain

registration from SEBI shall have to wind-up and

repay the money to the investors.


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Salient features of collective investment

schemes:-

CIS includes any schemes or arrangement with respectto property of any description, which enables investors to

participate in the scheme by way of subscriptions and to

receive profits or income or produce arising from the

management of such property.

Schemes structured for investment in shares/bonds and

other marketable securities would not be treated as CIS.


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LISTOF MUTUAL FUNDCOMPANIESIN INDIA

Public companies:-

UTI (1964

State Bank of India (SBI) (1987)

Reliance Mutual Funds Bank of Baroda

Canara Bank


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Private companies:-

Kotak Mahindra

ING saving MF

Escort India MF CEAT MF

Indus Ind MF


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RETURN FROM MUTUAL FUNDS

Dividends

Capital Gains

Increase or Decrease in NAV

MUTUAL FUND HOLDER'S ACCOUNT Regular Account

Accumulation Account

Withdrawal Account

Setting up Mutual Funds


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FREQUENTLY USED TERMS

Net Asset Value (NAV)

Sale Price

Repurchase Price

Valuation of Unit

(Market value of assetsLiabilities excluding contingent liabilities, initial

share capital, reserves & unit capital)+ (brokerage charges, commission .tax,

stamp duties, other management & administrative expenses)

Number of units outstanding

Sale Price =

Total market value of assets, or securities in the portfolio, of the fund Liabilities

Number of funds units (shares) outstandingNAV=


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BUYING MUTUAL FUNDS

Contacting the Asset Management Company directly

Agents/Brokers

Financial planners

Insurance agents

Banks Online Trading Account

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mutual fund ppt04.pptx