MINT MONEY’S GUIDE TO UNDERSTANDING
MUTUAL FUNDS MINT MONEY’S GUIDE TO UNDERSTANDING SERIES
MONIKA HALAN Editor, Mint Money
inancial planners report an interesting trend in the portfolios of the mass affluent—though the incomes have gone through a multiplier, the spending remains mired in middleclass values, leaving a surplus of up to 70% of posttax income. A little lower down the income ladder, the surplus may not be so lavish, but is enough for citizens to target financial goals such as paying for their kids’ study abroad or to maintain their lifestyle in their silver years. There is also the understanding that the old way of capital protection through fixed deposits may not be the smartest choice in a country that has two to three decades of swift growth ahead. Today 188 million people buy some form of a financial product. Out of this, 8 million participate in equity markets, directly or indirectly. On the supply side, retail financial products are growing in number and complexity. There are 39 mutual fund companies and another 23 are waiting for licences. There are 23 life and 21 general insurance companies. All large banks have a wealth management and mass retail piece as part of their total product suite. There are at least 100 brokerages and distribution companies. There are at least 3 million advisers. This market is at the threshold of significant expansion as the disposable income in India doubles over the next decade. The use of market-linked financial products is in its nascent stages. The mass urban affluent population is aware of the products, but still hesitates to make them a significant part of its asset allocation. One of the impediments to this is the lack of trustworthy advice. While regulatory changes will take time, there is space for a media-led initiative that will fill this information and knowledge gap as media remains an important source of information and advice for investors. The role of an adviser is to be on your side while evaluating various financial choices and products. Mint Money, the
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10-page daily section in Mint, is that adviser who has your financial well-being at heart. Mint Money covers stocks, funds, insurance, real estate, gold, loans and more. Not just advice, Mint Money also brings to you diverse views from within and outside the country on broader trends that affect your money. High networth investors rely on wealth managers but need help in understanding the nature of advice and products they are sold. Mint Money will carry stories specially geared for the high networth investor. We believe that you, the reader, get your news and information off a variety of sources. We hope to be there, wherever you look, whenever you need. If you happen to miss the daily 10-pager, the microsite, www.mintmoney.livemint.com, will have all that the newspaper carries. And it has more—calculators, webchats, videos and blogs. Switch on your television and Mint Money will be there soon with a weekly show. A key part of our Mint Money Everywhere plan is to deepen the print offering with a regular calendar of books that allow for a slightly deeper understanding of asset classes, products and investment choices. What you hold in your hand is the first book in the series. We have chosen mutual funds as the first book to mark the key role that funds will play as India transforms into a developed country in the next two decades. These are efficient, low-cost vehicles that allow you to ride the market in long term, or keep money liquid in the short term. Your constant feedback allows us to shift our edit focus as we go along and some of our best ideas have come from letters, emails and calls from readers like you. I hope to continue this process and look forward to feedback and suggestions on what else we can do. Good wishes for a prosperous and trouble-free money life. email@example.com
HOW TO CHOOSE
Which fund suits you could depend on your age, goals and risk appetite, among other things
TYPES OF FUNDS
Apart from the broader classification, there are other distinctions between funds you need to know
50 curated funds, out of which you can choose according to your needs
What is a mutual fund, why you need to invest in them and what are their advantages and disadvantages
HOW TO USE MINT50
There are various kinds of mutual funds. It’s best to understand the purpose of each before investing
HOW FUNDS WORK Cover illustration Jayachandran/Mint
Getting into the details of how a mutual fund works, what tenets it follows and how much it charges
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KINDS OF FUNDS
Out of a list of 50, how do you choose the ones that suits your investment requirements? Here’s the guide
List of fund houses, their addresses and phone numbers
FUND BASICS [ ] When you are sold a mutual fund, you hear what the seller wants to tell you. Knowing the basics of how a mutual fund works, its structure and its purpose will help you ask the right questions to make a financial decision that suits your needs.
anaging money is a daunting task for most people. While initial enthusiasm may lead to a spurt of action resulting in a basket of products, the regular regime needs research, regular investment and maintaining a portfolio. Financial fitness is not unlike physical fitness—both begin with
great enthusiasm, but maintaining the effort needed for actual fitness is tough. Just as getting a yoga teacher or signing up with a gym helps—not just in maintaining a routine and correct postures, but also in having an expert monitor your progress—a mutual fund is a vehicle that allows you to hand over the spe-
cialized work of managing your money to an expert.
WHAT IS A MUTUAL FUND It is a pool of money collected from a large number of investors by a professional entity with an aim to invest in different avenues for a variety of purposes. These avenues could be equity, debt, gold, com-
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modities, real estate and so on. At present, in India, mutual funds are not allowed to invest in real estate directly, though they can invest in equity shares or bonds of real estate companies. Equity, debt and gold are the most popular asset classes that Indian mutual funds invest in. The purpose of investment varies according to the asset
MUTUALFUNDS De-jargoned What is expense ratio? Every time you invest in your mutual fund, it incurs some expenses. They are on account of marketing and advertising, brokerages paid to brokers to buy and sell scrips, administrative charges and so on. The capital market regulator, the Securities and Exchange Board of India (Sebi), limits the charges that your MF can impose on you to 2.50% for equity funds and 2.25% for debt funds. Any expenses incurred by the fund over and above these limits are to be borne by the fund house.
Did you know?
class chosen. Equity is usually a vehicle for long-term wealth creation. Debt is used for capital protection. Gold is used as hedge against inflation and for liquidity. Investors can look at where the fund manager aims to invest and then match personal financial needs to choose a fund.
WHY WE NEED MUTUAL FUNDS Managing money is a specialized task and a mutual fund can be viewed as public transport to take people, who do not want to drive their own cars (that is, take their own investment calls), to their investment destinations. People who drive their own cars (invest on their own) can end up going faster if they are good at choosing their investments, or can end up badly hurt with a crashed car, losing money, due to poor investment choices. While mutual funds give an option to invest in several asset classes such as equity, debt and gold, retail investors find equity investing one of its biggest attractions as diversification makes it safer. Of course, investors can diversify using stocks, but will have to actively manage their stock portfolio and that requires knowledge and time. Mutual funds are for those who don't have the time to make money decisions every day but will do so, say, twice a year to examine their mutual fund choices and changed personal financial needs. Equity mutual funds are useful for lay investors since stock selection is not easy for an average investor and can be fairly risky. Reading balance sheets is a specialized task and knowing when to buy and sell needs active monitoring of 00
markets and events. Most people are busy with their jobs and families and have no time to spend on managing an active portfolio. Additionally, small investors run the risk of over-concentrating their portfolios in a few stocks and seeing their money erode due to the risk of a tight portfolio. Funds hire professional money managers to make investment calls and monitor the portfolio on a daily basis. The mutual fund route reduces volatility by diversifying the portfolio. The risk of having all your money in just one or two stocks is much higher than buying a basket of stocks that is diversified across the market and sectors.
YOU CAN REDEEM YOUR LIQUID FUND WITHIN 24 HOURS AND EQUITY AND DEBT FUNDS IN LESS THAN THREE DAYS
PLUS AND MINUS
Fund minuses Investors have to pay the fund manager irrespective of profit or loss. As the fund manager's sole job is to manage your money, they charge you every year in addition to certain costs they incur. The costs are capped but they can hurt when you lose money. Nothing wrong in paying them, but the catch is even if your fund underperforms the market, or even if markets do badly in some years like 2008 and you lose money, you have to pay the annual charge called the expense ratio. Investors have no control in stock selection. When you give money to your fund manager, it is his decision which stocks to buy or sell and when. It’s a doubleedged sword. His calls may go right. His calls may also go wrong. It’s not in your control. If his calls go wrong, you obviously lose money. There are no guarantees, as there aren't any when you invest directly in the markets.
Fund pluses Small amounts can be invested. You can begin with just Rs5,000 to buy a mutual fund scheme that invests across 50 companies. Investing in just one company can be very costly. For instance, armed with Rs5,000, you could buy just about, say, two equity shares of State Bank of India, India's largest public sector bank, but with a mutual fund, you can own tiny bits of many large companies. All, or some, money can be taken back quickly. Mutual funds are easy to redeem. Funds will buy back any quantity of units at the given price as denoted in the net asset value (NAV), or the price of each unit of a mutual fund. You can redeem your liquid fund within 24 hours and equity and debt funds in less than three days. There are some mutual funds that come with a lock-in, such as equity-linked savings Q
schemes, but they impose a lockin for a purpose—they give tax deduction benefits at the time of investing. Few others come with a lock-in, but they give redemption windows at regular intervals.
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Mutual funds cannot assure any returns Sebi has banned MFs from assuring any income—dividend or principal—to investors. Here's why: prices of equity and debt scrips go up and down, depending on their demand and supply. Your MF scheme's NAV also moves accordingly since the money is invested in individual stocks and debt products. Even liquid funds are prone to market swings. Good quality equity shares and high-rated debt scrips limit the chances of your fund's value going down to zero. However, they too fall in bad markets. In the 2008 market crash, the Nifty index (50 most liquid scrips on the National Stock Exchange) lost 52%. Large-cap funds also lost 53.12% on an average. Quality scrips limit your losses, but they don't eliminate losses completely. Capital protection-oriented funds aim to protect, and not guarantee, your money. These are compulsorily closed-end and, typically, invest in a mix of equity and debt scrips in a way that you get your principal—with some gains from the market—at the end of the term. Usually, these funds have a tenor of three to five years. What is NAV? NAV, or net asset value, is the true worth of a unit of a mutual fund scheme. It includes the gains it realizes in the market, dividend income, interest income it earns from the underlying scrips, less expenses it incurs and losses, if any. Since entry loads now stand abolished, a fund's NAV is the price at which you get to buy your units. When you sell your units, you get to see them at NAV plus a nominal mark-up, known as exit load.
FUNDS [ ] Mutual funds are going to be your money partner for the rest of your life. It is worthwhile to spend a little time understanding the various kinds of funds and what they mean for different investor types. It could make mutual fund investing safer and more profitable.
efore you buy anything, you usually do a market survey and see what is available and then match your need to the product. It is a good idea to do the same when you invest in a mutual fund. There are several ways in which mutual funds can be viewed. The most important distinction one must make is to choose what final products you are comfortable with. Mutual funds invest in different asset classes including equity, debt and gold. Real estate is also an asset class that is available overseas as an investment choice, but these are yet to come to India though the process is on. High return-seeking investors, who do not mind taking risk, look at equity as an investment vehicle. Short-term investors, who may want to keep money liquid, need some sort of regular income or keep their capital protected and look at mutual funds that invest in debt products. Investors seeking to diversify their portfolios and guard against inflation buy some gold through a fund. And then, there are those who want a fund to take care of multiple needs and look at hybrid products. These combine assets classes in various proportions to give an investor a ready-to-use asset-allocated fund. There are further subdivisions within each asset class.
Within equity, for example, there are clumps of stocks that carry lower risk than othersâ€”large-cap companies carry lower risk and return profile than mid-cap companies or those belonging to certain sectors. Mid-cap companies carry high risk but can also give a huge return kicker to the portfolio. Then there are other classifications that are important. The distinction between open-ended and closed-end funds is important, as is between active and passive funds. The three broad categories, or distinctions, follow:
EQUITY Equity funds are those that invest in shares of companies that are listed on the stock exchanges. The bonus and dividends paid out by the companies also get added to the total return of an investor. Within equity, there are various categories of products that come with their own risk and return attributes. Large-cap These funds invest in large and well-established companies in the market such as State Bank of India, Infosys Technologies Ltd, Reliance Industries Ltd and
Hindustan Unilever Ltd. These companies are heavyweights in the stock markets and are well researched by many experts, fund managers and analysts. Large-cap funds are, typically, the least risky funds. These companies are among the least volatile companies as they are mostly in mature businesses and have left the volatile growth period behind. They are also widely held companies with shareholders running in millions in certain cases. Most diversified funds prefer to be invested significantly in large-cap scrips to limit their volatility, but that is not always a certainty. Mid- and small-cap These funds are riskier than
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large-cap funds. They invest in smaller companies that are in their growing stages. The large companies of today were once upon a time small- and midsized companies. Since midand small-sized companies are in their growing stages, they can get volatile in choppy and uncertain markets. These are
HOW THEY FARED
LARGE-CAP FUNDS ARE THE LEAST RISKY FUNDS. DEBT FUNDS INVEST IN FIXEDINCOME YIELDING INSTRUMENTS. HYBRID FUNDS INVEST ACROSS EQUITY, DEBT AND GOLD
(Return in %)
Category average Top 5 active large-cap funds Bottom 5 active large-cap funds
(Return in %)
Category average Junior Nifty BeES ETF Top 5 active mid-cap funds Bottom 5 active mid-cap funds
Source: Morningstar India
high-risk companies—they typically rise more than large-cap funds in rising markets, but fall more than large-cap companies in falling markets. When these companies graduate to being large-cap companies, their share prices show a sharp increase over a period of time. If your fund manager correctly spots these companies, he could make a killing. Wrong calls can also prove to be very costly and are punished by a severe fall in value. Sector/thematic These invest in select sectors and companies. While sector funds invest in one or two sectors, thematic funds invest in a bunch of sectors that are woven by a common theme, such as infrastructure, consumer spending and fast-moving consumer goods. These are the most risky of all types of funds as their portfolios are, typically, very concentrated. For instance, in May, the portfolio of one of the services sector fund had just 13 stocks as it invests in just banking and financial sector stocks, limiting the universe of stocks it can pick. On the contrary, a diversified fund has 30-100 stocks. On account of their lack of diversification, fortunes of sector and thematic funds depend on a handful of sectors and stocks. Hence, it is generally advisable for investors to have a proper understanding of the theme or sector in which they wish to invest through a sectoral or thematic fund.
DEBT These are funds that invest in fixed-income yielding instruments. Debt funds are used for some kind of regular return and capital protection. There are many types of debt funds, but broadly they fall into three types: Bond Bond funds invest in corporate bonds and partly in government securities. These funds are longterm and short-term in nature. Typically, long-term bond funds carry an average maturity of two or more years to about five or maybe even 10 years. This means that they invest in scrips that mature around that period on an average. The longer a debt fund's average maturity, the riskier it gets because scrips with long maturities take a long time to get wound up and, therefore, get exposed to market vagaries and volatilities for a long time. Shortterm bond funds, typically, carry a maturity of one to two years. Government securities The second type of debt fund is government securities fund. Like bond funds, these too come in long-term and short-term variety. These are mostly seasonal funds as they invest only in government securities—scrips issued by the Reserve Bank of India. Though government securities are the safest debt instruments because they are issued by the government of India and, hence, come guaranteed, they are also the most volatile because they are the most liquid instruments in the debt market. Other instruments
such as corporate bonds can get very illiquid and, hence, don't see much price volatility comparatively. Like bond funds, government securities funds come with an average maturity of two or more years to five or maybe even 10 years. Short-term government securities funds, typically, come with a maturity of one to two years. Liquid The third type of debt fund is a liquid fund. These are funds meant to park your surplus cash from a time period of overnight to about three months. In the mutual fund space, these are considered the safest because they invest in scrips that mature in a very short time. Hence, they aren’t as volatile, though there are no guarantees. The 2008 market crash brought about a lot of pain to liquid funds. Subsequently, the capital market regulator, Sebi, introduced a lot of changes in liquid funds and made them much safer. A variation of liquid funds is called ultra short-term (ST) funds. They were earlier called liquid-plus funds. Ultra ST funds work just like liquid funds, but can invest in scrips that mature in up to 90 days. As they have a higher leeway, they have the potential to earn a bit more than what liquid funds can earn. Typically, in steady markets, if liquid funds fetch around 3.75% returns per annum, ultra ST funds can return about 4.5% returns. Compared with them, savings bank accounts earn only 3.5%.
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These are mutual funds that invest in gold bars or goldbacked securities. Gold funds are of two types—those that mimic gold prices in the form of an index fund and those that buy shares of gold mining companies. Gold exchange-traded funds (ETFs, an index fund that is listed on the stock market) have become very popular during the run up in gold prices over the last few years. In FY10, while assets under management (AUM) of equity ETFs went up to Rs24,066 crore, up from Rs14,267 crore—a jump of 69% at the beginning of the financial year—gold ETFs jumped by 122% to Rs1,590 crore, up from just Rs717 crore in the same period. Since these are passive funds, they mimic the price of gold. When gold prices go up, gold ETF NAVs go up too and vice-versa. Some funds also actively invest in gold mining. These are MF schemes that solicit your money and then invest their entire corpuses in international funds of their own parentage. The international fund will then invest in equity shares of gold mining companies. At present, since there are no listed gold mining companies in India, your money in these funds are sent abroad and invested there. For instance, DSP BlackRock World Gold Fund is an Indian fund and available to Indian investors in India. This fund invests its entire corpus in BlackRock Global Funds-World Gold Fund, which is listed abroad.
HYBRID Hybrid funds invest across equity, debt and gold. They are either balanced funds (invest around 65% in equities and rest in debt) or monthly income plans/regular income plans (invest up to 25% in equities and the rest in debt). They are less risky than equity funds, but carry more risk than debt funds.
FUNDS [ ] The distinctions in funds are useful to know to get the best out of your investment. There are different fund types for different needs of a person, so choosing among the available options become as crucial as choosing a fund.
OPEN-ENDED AND CLOSED-END
also come with a fixed tenor such as three, five or, typically, 10 years. Once the period gets over, closedend funds either redeem the money to their investors or convert them to open-ended funds. Different periods of time in the last 20 years have seen openended and closed-end funds change in popularity, not due to investor interest but due to what the asset management companies (AMCs)—the corporations that carry out the asset management function for the mutual fund—wanted to launch. In the early years of the opening up of the mutual fund market, fund managers were not sure if investors would come and stay in the fund. Due to this uncertainty on account of investor behaviour, most schemes launched in the 1990s were closedend schemes. As the market matured, fund houses moved to offering open-ended products—they now knew that real retail money (your money) is sticky and does not like to shift in and out of funds. Funds switched to launching closedend funds in 2006 and 2007 due to a cost advantage that closed-end funds had that allowed them to charge initial marketing fees from you. That arbitrage is over and
Another distinction in funds is based on the length of time for which the fund is collecting money. There are two kinds of funds under this classification: open-ended and closed-end funds. Open-ended These are funds where you can get in and out anytime you want as they have perpetual life. As inflows are unlimited and, typically, unrestricted, there is no limit to which the corpus can grow to. According to mutual fund tracker Morningstar India, the largest equity scheme in India as of May-end had a corpus of Rs7,490 crore. And the oldest scheme has been at work for the last 38 years. At present, most fund houses prefer to launch open-ended funds as it helps the fund house garner money consistently and manage it on a continuous basis. Closed-end These are funds that restrict their inflows. Once they are launched, they are open for subscription for a few days. Once the subscription period ends, they stop accepting money from the public. Closed-end funds, therefore, 14 | JUNE 2010
mint money FUND DETAILS Closed-end
Amount collected (Rs crore) Total number of funds
7,764 1,521 0
THE REASON FOR THE EXISTENCE OF AN ACTIVE FUND IS TO BEAT THE BENCHMARK IT HAS CHOSEN TO MEASURE ITS PERFORMANCE AGAINST
Source: Value Research
currently funds launch open-ended and closed-end funds with the investor and purpose of the fund in mind (though a majority of funds are now open-ended funds).
ACTIVE AND PASSIVE Another distinction that is important is between active and passive funds. This distinction is based on how the fund manager views his role. Active funds are those that aim to beat the market benchmark. A benchmark is a reference point against which fund managers and investors can compare performance. For example, most equity funds will have either the Sensex or the Nifty index as benchmarks. The funds that want to just mimic an index are called passive funds. Investors who want to have an investment vehicle that they want to choose once and then just use over their investment lifetimes, without worrying about whether their fund manager is going to stay with the fund or whether he will sustain the performance, choose passive funds. Investors who want returns that are ahead of the market, and do not
mind taking the higher risk that comes due to the fund manager's risk, choose active funds. Active fund The reason for the existence of an active fund is to beat the benchmark it has chosen to measure its performance against. The fund managers of active funds believe they have the ability to select stocks and time the market in a manner that makes the returns on their portfolio higher than what the market (in the form of the benchmark) gives over a specific period of time. Active funds have fund managers who have the freedom to pick and choose stocks they want to buy or sell. Of course, the freedom comes in an institutional structure with internal rules. Since fund managers are actively involved, there are costs on research and transaction. Passive fund Also called index funds since their only aim is to mimic an index, they don't have fund managers. In fact, they don't need fund managers. They simply mimic their bench-
ACTIVE FUNDS 120 100 80
(Return in %)
Top 5 active funds Bottom 5 active funds Category average (active funds) Nifty BeES ETF*
60 40 20 0 -20 -40 -60 -80
Only open-ended large-cap equity funds have been considered in the active funds category; *India's first exchange-traded fund. This fund is based on Nifty index
Source: Morningstar India
mark indices. They invest in scrips—and in exactly the same proportion—as lie in their benchmark indices. They move up and down as much as their benchmarks move. For example, a passive fund on the Nifty index will buy all 50 stocks in the Nifty in the same proportion as are held by the Nifty. Each time a stock is taken out or added to the Nifty index, the fund will do the same. On a day-to-day basis, this makes lesser work than what managing active funds would entail. Changes in the composition of the index are usually not more frequent than once a year. However, the individual weights of scrips in an index change every day and since index funds are mandated to simultaneously change their scrip weights in the last half hour before the equity market closes, by rebalancing their existing portfolios, index funds do end up incurring some cost. Investors can expect almost the same return as the index their fund tracks, though there will be a small difference between an index fund's performance and that of its benchmark. Called tracking error, this is caused because of the small cash component that every index fund keeps (to face redemption pressure) and also the various costs it incurs (that eventually reduce your fund's NAV) such as brokerage, advertising and marketing. Costs are lower in a passive fund compared with an active fund. Passive funds are of two kinds— index mutual funds and exchangetraded funds (ETFs). An ETF is an index fund with just one difference from the investors’ point of view. Investors can buy and sell ETFs on the stock markets as they need to be listed on a stock exchange. ETFs come with several advantages over an index fund. First, they have lower fee than index funds and lower tracking error. They also allow you the facility of real-time buying and selling, unlike index funds that will give you the price once a day on which you will invest.
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Guide to understanding mutual fund growth and dividend option Most MF schemes have dividend and growth options. The dividend option gives out a cash flow by liquidating some units periodically, while the growth option allows the money to stay invested. While filling the investment application form, if you forget to choose one, your fund will allot you the default option. MFs pay dividends whenever your investments earn a profit that they can pay out. If you need periodic dividends as a source of income from, say, debt funds, or if you feel the need to periodically book profits in your equity funds, choose the dividend plan. Remember, dividends come out of your own pocket. When a fund declares dividend, its NAV comes down by that extent. Dividends are good for those who reinvest them effectively or those who need them as current income.
Did You Know? Thematic funds can invest in other themes By rule, thematic funds invest in sectors that match with their focus. So, how come you see a technology company in a rural india fund or in an infrastructure fund. The former focuses on rural India, the latter invests in infrastructure. Can they sway? Yes, they can. Thematic funds, typically, aim to invest at least 65% in their chosen themes. They can also invest in scrips or sectors that they perceive to belong to their theme even though the common perception is otherwise. For instance, the infrastructure fund can consider that banks drive infrastructure growth (through loans) and consider them ancillary scrips. And that’s permissible in their offer document. What should you do? Read the offer document and check out the fund’s definition of the theme. Invest only if it matches with what you’re looking for. Thereafter, track the fund’s portfolio statements. If you find consistent large-scale diversions, stay away. Thematic funds are risky because they focus on fewer sectors.
WORK [ ] Funds in India have a fairly simple product structure. The rules around benchmarking, costs and fund structure ensure that funds are easy to enter, hold and exit—kkey attributes for an investment product. Their structure also ensures comparability that leads to better investment decisions. It is an efficient retail vehicle for investment.
mutual fund in India has a three-part structure—a sponsor, trust and asset management company (AMC). The sponsor is the promoter with a business view who initiates the business to earn a profit. The AMC is the entity that manages the business of the mutual fund. The trust is the entity that holds the investors’ money so that neither the sponsor nor the AMC can use it for purposes other than the investment mandate of the mutual fund. A trust is also the internal governance body that ensures protection of investor interest. India has not seen a single instance of a mutual fund running away with the investors’ money, as was seen in the case of plantation companies and many other get-rich-quick schemes over the years. The market value may have been halved, but that has been due to market valuations and not because the sponsor or your AMC has run away with your money. If the sponsor loses business interest, he can sell his stake to another sponsor who takes over the fund. Investors face market risk, but not the risk of systemic fraud when they invest in a mutual fund. There are some basic rules of understanding a mutual fund and evaluating its performance.
Investors need to study these before they make investment decisions. There are four things investors need to know before they invest. One, what is the investment mandate of the fund they are choosing. Two, what is the benchmark the fund tracks its performance against. Three, what is the return history of this fund. Four, what are the costs that they will face.
INVESTMENT MANDATE You need to ask the question— what does the fund aim to do with my money? As the investment mandate defines what your fund is and where it aims to invest your money, it tells you whether or not the fund is suited for you. Every mutual fund scheme is supposed to have an investment mandate. This mandate tells you what the fund is about and what it does. It lays down the boundary within which the fund is supposed to play. The details of this mandate are present in the offer document. An offer document tells you everything that you need to know about a particular scheme and also the fund house. This is a legal document that says that your fund cannot invest beyond its mandate. If you find that your fund has crossed its investment mandate, you have the right to take action.
BENCHMARK If your fund returns 10% over a year, how do you know whether it is good or bad performance? Enter benchmark indices. Every fund is mandated to have a benchmark index and is also mandated to compare its own performance with that of the benchmark index. This gives you an idea of how your fund is performing. If you find that your fund is consistent-
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ly underperforming the benchmark index, it's time to exit and switch to a better performing fund. For example, your fund may have returned 50% over a particular year, but if the index it tracked, say, the Sensex, went up by 70%, your fund has lost your money. You would have been better off investing in a passive broad market index fund or a better performing active fund with a similar investment mandate.
Guide to understanding expense ratio
NEW SCHEMES LAUNCHES
What is an expense ratio? There are no free lunches in life. In order to multiply your money every time you invest in your MF, your fund house incurs some expenses. Expense ratio is the cost that bites into your MF returns. So, every time your fund makes some money, it bites off some bits and you get to have the rest. It comes in many disguises such as marketing and advertising expenses, brokerage expenses and administrative charges. You can't avoid it.
Equity-linked savings scheme Growth/equity
4,512 101 4,411
Source: Association of Mutual Funds of India
RETURN HISTORY Although past performances don't guarantee future returns, it gives you comfort if your fund has performed well in the past. It gives you an indication of how the fund has done. Take a look at past performances of funds in their fact sheets that they disclose once a month or every quarter. You can also check out a fund's website to know more about their performances.
COSTS OF A FUND As managing people's money incurs costs, mutual funds are allowed to charge these to investors. Your fund's NAV comes down to the extent of this cost that MFs are allowed to charge you. Over the years, the costs of funds have come down due to regulatory action and growth in the fund size. Earlier, funds were allowed to charge up to 6% of the assets it collected every time it launched a scheme. If the new fund offer (NFO) collected Rs1,000 crore, Rs60 crore could be taken away from your money towards marketing charges and commissions to the agents. Sebi banned open-ended funds to charge this cost from April 2006 and closed-end funds from January 2008. There are four kinds of costs investors need to understand. Loads: These are embedded costs in the price of a mutual fund that are collected by the fund house and given to the agent or bank who sells you the fund. It is a price you pay for the services received in helping you buy the product. Effective 1 August 2009, it has become a lot cheaper to invest in mutual funds as Sebi abolished entry loads that were earlier at 2.25% of your investment. You need to pay fees directly to your agent, commensurate to his services, though entities such as banks do deduct a sales charge from your investment money. You can also
1,635 2010 (till May)
invest in MFs through online portals that are free of cost at present. They offer the convenience of investing in funds through an online platform as well as other tools to track your portfolio. Most brokerages and banks also offer facilities to buy funds through them. They press nominal charges though. For instance, some large brokerages charge Rs100 for all lump sum investments, irrespective of the amount (for portfolio values of less than Rs8 lakh). Few others charge Rs100 every quarter. Fund management charge: Equity funds can charge a maximum of 2.5% of the net assets. Debt funds can charge a maximum of 2.25% of the net assets. Usually as the size of the mutual fund grows, economies of scale kick in and costs per head tend to go down. Large equity funds with assets under management (AUM) of over Rs500 crore now charge a little under 2% as their annual costs, while the smaller ones cost the full 2.5%. The total cost also includes fund management charges of a maximum of 1.25%. This is the income of your AMC that pays salaries to your fund managers. Any costs incurred over and above the limit are absorbed by the fund house.
Timeline of the reducing load 4 April 2006 Amortization of expenses disallowed for open-ended funds. Only closed-end funds can amortize the expenses. Closed-end funds exempt from charging entry loads 4 January 2008 Entry loads waived on direct applications 31 January 2008 Amortization banned for closed-end funds also 1 August 2009 Entry loads on all MFs banned
Exit cost: Many funds charge exit loads or a charge on your money when you want to sell your investment. This is mostly up to 1% of your investment amount. However, exit loads are charged usually for early withdrawals such as six months to a year for equity funds. They act as a deterrent to quick withdrawals that could put pressure on fund managers to generate cash to meet redemption. After a year, most equity funds become zero exit-load. Tax: Tax is imposed when you withdraw your money from MFs. If you withdraw from an equity fund before one year, you pay 15% tax on your capital gains (selling price less cost price). Capital gains are exempt from tax if you withdraw from an equity fund after one year of investing. Withdrawals from debt funds are taxed at income-tax rates if you withdraw your debt fund units before one year. If you withdraw from debt funds after a year, you pay 10% tax without indexation or 20% with indexation. Dividends are taxfree in your hands. However, debt funds pay a dividend distribution tax (DDT) of 13.840% of the dividend amount that they distribute. Though dividends are tax-free in your hands, DDT comes out of the dividend to be distributed. So, in effect, it's you who end up paying the tax. Dividends from equity-oriented funds are completely taxfree. These are going to change if the revised Direct Taxes Code, tabled in mid-June, comes into force. Most of the tax shelters for funds will go away.
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How much can be charged Sebi forces all fund houses to keep expense ratio in check. Equity funds can charge up to 2.5% and debt funds up to 2.25% of the net assets. The might and effect of expense ratio goes down as the size of your fund goes up because a large-sized fund has more capacity to tackle it compared with small-sized funds. Fund houses are free to have more of it, but beyond the Sebi-mandated limit, it cannot affect your money. Anything more than the Sebi limits and the fund house gets it out of its own pockets. Is that it? Until August, when you invested in an MF scheme, it used to bite off 2.25% of your investment amount. Your fund used to pass this to your agent as his commission. But Sebi wants to cut down expense ratio to size. It feels that agents should directly recover costs from investors rather than charging the fund house. Why is this important? The smaller the expense ratio, the bigger will be your returns. Back of the envelope calculations show that Rs50,000 invested in a diversified equity fund that charges 2.5% yields Rs5.27 lakh after 20 years, assuming the equity markets grow at 15% on a compounded basis, against Rs6.29 lakh by an index fund that charges its maximum permissible 1.5% and Rs7.50 lakh by an exchangetraded fund that charges 0.5%.
HOW TO CHOOSE
Finding a suitable mutual fund is all about knowing more about yourself. Your current stage in life, your age, how much money you can invest and for how long, how much risk you are happy to take and what you want out of that investment. Choosing a fund becomes much simpler when you know what you want out of the product.
nowing about the funds is only one part of the journey. You need to match your investment needsâ€”stage in life and your own appetite for risk to match your profile with that of a mutual fund you buy. Investors tend to get swayed either by recent top performance of a fund or by sharp sales practices. Mature investing would mean matching own needs to products in the market and if you cannot do this yourself, paying an adviser or financial planner to do this for you.
CHECKLIST OF CHOICE Why do you need a fund Ask yourself why you need a mutual fund. Since there are over a thousand schemes in the market today, you need to match what you need with what you buy. Here are some reasons why you need an MF and some fund types that go with it. Q If you just want to park your cash, you need a liquid fund, preferably an ultra short-term (ST) fund. Q If you want to invest for about two-years, but you may just need the money anytime after, say six months, you need to buy a short-term bond fund. Q If you don't need the money immediately and can take some
risk, you can invest in a low-risk equity-diversified fund, such as a passive fund like the index or an exchange-traded fund. If you don't need the money immediately but are comfortable with taking high risk, you can invest in actively managed equity fund. If you are retired with a good pension and have a surplus that you need to invest, you need an equity fund if you are willing to take risks or a balanced fund with an equity exposure to keep your money ahead of inflation.
How old are you Age is an important factor in understanding what products you should buy. Ideally, the younger you are, the more you should invest in equity. A rough rule of thumb subtracts age from 100 to arrive at how much of your portfolio should go into equity products. However, the exceptions to this rule are many. There are many senior citizens who earn a good pension and have surplus cash that they like to invest in equity even though their age may not indicate such a high-risk
appetite. You need to keep your own finances in mind before you apply this rule. For how long do you want to invest Especially for equity fund investing, it is important to stay invested for a long time to get the most out of your mutual fund. For equity funds, a time horizon of at least three years is a must. Your investment's duration is most important in debt funds because different debt funds fall in different maturity buckets. You need to make sure your investment matches your debt
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fund's duration to make sure the returns are commensurate to the period you stay invested and get the most out it. Investments overnight to up to a month work well in a liquid fund. Between one and five months, the ultra ST funds work. Between five months and a year-and-a-half, the short-term bond funds are your friend. Anything above that, it is the longterm bond fund route. Are you ok with risk An MF is not a guaranteed product and risk is inherent with any
mint money MF. However, the levels of risks differ from MF to MF according to where they invest and whether they are active or passive. Liquid funds are the least risky while sector equity funds are the riskiest. However, even liquid funds can be risky, like they were in 2008 when there was a global freezing of money markets and it was only for the second time in about 10 years that liquid funds lost money. Active funds are more risky compared with passive funds since you are taking the risk of a fund manager taking stock calls that may go wrong. Within index funds, funds mimicking broader indices are less risky than those that mimic market segments. For example, risk is lower in a Nifty index compared with an index on Junior Nifty (This is a mid-cap-oriented index). Within the equity bucket, large-cap funds carry lower risk than sector, thematic or mid-cap funds. Remember, though, that to earn kicker in returns, you need to take some risks to be able to earn more than inflation as the latter can easily eat into your returns over a period of time.
HOW TO BUY A MUTUAL FUND You can buy directly from the mutual fund house or from an agent or distributor. If you wish to go directly, you have two choices. Visit the fund's website and download your chosen scheme's investment application form. You can also get the form from its registrar and transfer agent's office. Fill the form, attach the cheque and submit it either at your fund's office or
ASSETS UNDER MANAGEMENT (Rs crore)
2,11,192 1,97,878 1,95,404
2010 (till May)
Source: Association of Mutual Funds of India
Guide to understanding a fund of funds What is it? The fund of funds scheme is quite like any other mutual fund (MF) scheme. You invest in it and your money is deployed in the markets. You can put in as much money as you like but, generally, Rs5,000 is the amount to begin with. What sets it apart? It is not like your typical MF scheme. While other MF schemes invest in shares and bonds directly, fund of funds invest in other MF schemes. Some of its clones invest in equity schemes and some in debt. its registrar's office. If you have an agent, have him deliver the form to you. Fill the form, attach the cheque and submit it to your agent. Alternatively, you can also ask your bank to help you invest in mutual funds. They will charge you though. Now, online brokerages also allow you to buy mutual funds. If these online brokerages belong to banks, they would mandate you to open a bank account with them, else, independent online portals that specialize in mutual fund investing typically have tie-ups with several banks. A new trend that became visible in 2009 was the use of online comparison, transacting and maintaining portals that do not charge anything, yet offer a slew of services. Transacting funds over the Internet is not new and can be done in several ways. One, most fund houses have been offering their own schemes online. But this is just half the solution for an investor who has a portfolio of several holdings. Getting a consolidated look at his net worth is a transaction nightmare along this road. Two, all brokerages, including online, also offer MFs in addition to equity shares. Three, banks, too, allow transaction in mutual funds on their own websites. Investors run the risk of getting a filtered choice of schemes and of still paying transaction costs that may charge as much as 1.75% of their investment for just moving money from their savings account to the fund. The new kids on the block are the independent online MF portals such as Fundsindia.com, Fundsupermart.co.in and Powermf.com. These work like online marketplaces for funds.
ACTIVE FUNDS ARE MORE RISKY COMPARED WITH PASSIVE FUNDS SINCE YOU ARE TAKING THE RISK OF A FUND MANAGER TAKING STOCK CALLS THAT MAY GO WRONG These are do-it-yourself channels and are meant for those who are confident of taking their own investment decisions. Some charge you nothing for a choice of most funds and a facility to consolidate your MF investments at one place. Online markets such as Fundsindia.com and Fundsupermart.co.in are free and earn trail commissions, but others are not. Most brokerages and banks press nominal charges. Next to cost is the choice parameter. Typically, banks offer a wide choice, though some are choosy. Online brokers and marketplaces have most funds. But it is best to check. For example, Fundsindia.com does not have MF schemes of some key fund houses. The next in line is convenience. While brokerages give you a consolidated holding statement across your equity and MF investments, online marketplaces give you a consolidated statement just for funds. What these sites do allow, however, is portfolio analysis in many interesting ways. For example, it could give your total investment in Infosys Technologies Ltd or, say, the pharmaceutical sector, across all your mutual fund holdings.
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Why not invest in markets Not only is it tough to consistently pick winning scrips over the long term, it is a challenge to pick winning MF schemes (that, in turn, invest in them) consistently. So, just like other MF schemes help you diversify across stocks and bonds, fund of funds help you diversify among MFs. What's is the downside The tax treatment can hurt you as an investor. It is treated like a debt fund even if it invests everything in equities. An additional expense ratio of 0.75% that it charges you, in addition to what the underlying schemes charge, also adds to your burden.
De-jargoned | KYC norms What is KYC KYC stands for know your client. Compliance with KYC norms are mandatory if you invest Rs50,000 or more in MFs. These norms have been put in place to prevent the serious global issue of money laundering. Check your status You can find out whether you are already KYC-compliant. To do that, visit 'www.cvlindia.com'. Enter your permanent account number and submit. If you are already KYC-compliant, you will get an acknowledgement. Take a print out of this acknowledgement and attach a copy with your MF application form. If you aren't KYC-compliant You will easily get a KYC form on the Internet. Take a printout, fill up the form and attach an address proof. Submit a copy at a centre that accepts KYC forms, such as your bank's branch or your MF's offices or its registrar's offices. You can also get a KYC form at these centres.
Mutual fund schemes to invest in We understand that choosing funds is a daunting task and therefore we have used quantitative and qualitative tools to short list 50 mutual fund schemes that we consider investment-worthy. You need to still work to choose between 4-10 from this list for a robust portfolio of funds. Scheme
Net asset value
CORE Birla Sun Life Frontline Equity A Gr
DSP BlackRock Top 100 Equity Gr
Fidelity Equity Gr
Franklin India Index NSE Nifty Gr
Franklin India Prima Plus Gr
HDFC Equity Gr
HDFC Top 200 Gr
Kotak Sensex ETF1
Nifty BeES ETF1
DSP BlackRock India Tiger Gr
DWS Alpha Equity Gr
ICICI Pru Dynamic Gr
ICICI Pru Infrastructure Gr
Quantum L/T Equity Gr
Sundaram BP Sel Focus Gr
Tata Infrastructure Gr
Tata Pure Equity Gr
UTI Dividend Yield Gr
Peer group average
DSP BlackRock Equity Div
Peer group average
Reliance Regular Savings - Equity Gr Templeton India Growth Gr UTI Opportunities Gr
SMALL/MID-CAP CORE Birla Sun Life Mid Cap A Gr DSP BlackRock Small Midcap Gr Junior Nifty BeES ETF1 Tata Equity P/E Gr
POWER Reliance Diversified Power Sector Gr2
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mint money Scheme
ELSS (TAX SAVINGS)
MUTUALFUNDS Net asset value
Religare Tax Plan Gr
Peer group average
HDFC Prudence Gr
Tata Balanced Gr
FT India Balanced Gr
Peer group average
Birla Sun Life Monthly Income Gr
Canara Robeco MIP Gr
FT India MIP B Gr
HDFC MIP L/T Gr
HDFC MIP S/T Gr
Reliance MIP Gr
UTI MIP Gr
Birla Sun Life MIP Savings 5 Gr
Peer group average
Net asset value
Fidelity Tax Advantage Gr HDFC TaxSaver Gr Sundaram BP Taxsaver Gr
MODERATE ALLOCATION CORE Birla Sun Life 95 Gr DSP BlackRock Balanced Gr
CONSERVATIVE ALLOCATION CORE
CORE DWS Short Maturity Gr
HDFC High Interest Gr
ICICI Pru S/T Gr
Kotak Bond S/T Gr
Reliance S/T Gr
Templeton India S/T Income Gr Peer group average
NAVs and returns are as on 16 June; Morningstar rating is as of May; NA: the fund has not yet completed the relevant time period; 1 an ETF, this can be bought or sold only on stocks exchanges. You need a demat account to be able to transact in ETFs; NR: not rated, since the scheme is less than 3 years old; 2though Morningstar India classifies this scheme as large-cap-oriented, we have put it in the mid-cap category since it can invest around half of its portfolio in mid-cap scrips; na: not available
21 | JUNE 2010
HOW TO USE
Mint50 uses a two-step process to cull out these 50 funds out of a list of at least 1,000 schemes in the market. The thresholds that funds must cross to be a part of the list include tenor of the fund in the market, past performance, its attitude to risk, the costs it incurs and a look at how the fund manager navigated down markets.
METHODOLOGY Just looking at returns while choosing the next fund to buy is a sure way to lose money. What investors need is some measure of a fund’s performance over the long term, while keeping an eye on the fund manager’s expertise and costs. Mint50 uses a two-step process to filter out schemes. Some risks are quantitative and therefore they can be mathematically arrived at, while a few others are qualitative and need a subjective approach. Among the former is a number called downside risk that measures a fund’s return per unit of risk. The higher the riskadjusted return, the better the fund. Mint50 uses ratings from mutual fund tracker Morningstar to generate a shortlist of funds. Morningstar gives star ratings on the basis of risk-adjusted returns, going from a low of 1 to a high of 5. Mint50 picks up all funds with a threshold three-star rating. Funds can have off-periods in their life and drop off the 4- or 5-star threshold. A three-star rated threshold eliminates around two-third of the funds. Next are the qualitative parameters where we consider fund mandates, returns conSTYLE BOX Value Large Mid Small
sistency, portfolio analysis and fund manager audit. The analysis looks at portfolio performance across rising and falling market periods to see how a fund navigates market volatility. A portfolio analysis gives insights into what the fund manager is really doing behind the net asset value number.
HOW TO USE MINT 50 There are at least 1,000 MF schemes to choose from. Picking the right one
or the one that suits your style is tough. That's where Mint50 comes in. MF experts in Mint Money have chosen 50 schemes across equity- and debt-oriented categories that have been selected following a welldefined process. However, investors must not buy all 50. After about 10 funds, the benefits of diversification levels off and you are better off buying just an index fund. A well-chosen portfolio is diversified across fund
It is a nine-square grid. Each column represents an investment style. The first is "value". A fund marked in this column would pick stocks due to low valuation (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value and cash flow). The central column represents "blend" funds, including value, core and growth stocks. The last column is "growth". A fund in this column would pick stocks of companies that are growing fast (high growth rates for earnings, sales, book value and cash flow) and high valuation (high price ratios and low dividend yields). The rows are the market-cap categories across large-, mid- and small-cap. A fund in row one would buy stocks of large-cap companies and that in the bottom row would buy stocks in small-cap companies.
22 | JUNE 2010
houses, fund types and asset classes. Pick and choose around four to 10 schemes from Mint50. Don't worry if schemes, you are already invested in, are not a part of Mint50. Not all schemes that are outside Mint50 are not investment worthy. While poorly managed schemes are aplenty in the market, there are many that are good performers, but not a part of Mint50 because we think these are better alternatives. Mint50 is not a guide to existing investments. Refer to it if you choose to invest afresh or want to choose an alternative after deciding to rebalance your portfolio. After ascertaining how much you want to put in equity and how much in debt funds, take a core and satellite approach. The “core” schemes are the rock solid, long-term performers. You can consider staying invested in them for a long time. The “satellite” portion can be used to add the returns kicker. If you are planning to invest afresh, start by putting money in large-cap funds and later diversify into mid-cap funds. One last thing: Morningstar India pitches active and passive funds in the same category. So, it is possible that passive funds, such as Benchmark Nifty BeES and Franklin India Index Fund, have a lower Morningstar rating. In rising markets, ETFs and index funds typically underperform and, hence, a lower star rating. But since a passive fund's mandate is never to outperform the index, but to mimic it, a lower rating doesn't matter.
[ AIG Global Asset Management Co. (India) Pvt. Ltd FCH House, Ground Floor, Peninsula Corporate Park, GK Marg, Lower Parel, Mumbai www.aiginvestments.co.in 1800 425 3444 Axis Asset Management Co. Ltd 11th, Nariman Bhavan, Vinay K Shah Marg, Nariman Point, Mumbai www.axismf.com 1800 3000 3300 Baroda Pioneer Asset Management Co. Ltd 501 Titanium, 5th Floor, Western Express Highway, Goregaon (E), Mumbai www.barodapioneer.in 1800 419 0911 Benchmark Asset Management Co. Pvt. Ltd 405, Raheja Chambers, Free Press Journal Marg, 213, Nariman Point, Mumbai www.benchmarkfunds.com 1800 22 5079 Bharti AXA Investment Managers Pvt. Ltd 51, East Wing, Kalpatru Synergy, Vakola, Santacruz (E), Mumbai www.bhartiaxa-im.com 1800 103 2263 Birla Sun Life Asset Management Co. Ltd One Indiabulls Centre, Tower 1, 17th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road (W), Mumbai www.birlasunlife.com 1800 270 7000
Knowing your fund house is a good idea for it is usually a long ride ahead with it. Good funds have loyal investors who stay on for years and years. This list puts all the contact data of all the funds in the market in a form that you will find easy to use.
www.edelweissmf.com 1800 425 0090
Mumbai www.ingim.co.in 91-22-40827999
Escorts Asset Management Ltd 11, Scindia House, Connaught Circus, New Delhi www.escortsmutual.com 91-11-43587420 FIL Fund Management Pvt. Ltd 56, 5th Floor, Maker Chambers VI, 220, Nariman Point, Mumbai www.fidelity.co.in 1800 2000 400 Fortis Investment Management (India) Pvt. Ltd 10th Floor, Sakhar Bhavan, Nariman Point, Mumbai www.fortisinvestments.in 91-22-66560000 Franklin Templeton Asset Management India Pvt. Ltd Wockhardt Tower, Level 4, East Wing, C-2, G Block, Bandra Kurla Complex, Bandra (E), Mumbai www.franklintempletonindia.com 1800 425 4255 HDFC Asset Management Co. Ltd Ramon House, 3rd Floor, HT Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai www.hdfcfund.com 1800 233 6767 HSBC Asset Management (India) Pvt. Ltd 314, Dr DN Road, Fort, Mumbai www.assetmanagement.hsbc.com/in 1800 209 0100
Canara Robeco Asset Management Co. Ltd Construction House, 4th Floor, 5, Walchand Hirachand Marg, Ballard Estate, Mumbai www.canararobeco.com 1800 425 0018
ICICI Prudential Asset Management Co. Ltd 3rd Floor, Hallmark Business Plaza, Sant Dyaneshwar Marg, Bandra(E), Mumbai www.icicipruamc.com 1800 200 6666
Deutsche Asset Management (India) Pvt. Ltd 2nd Floor, 222, Kodak Marg, Dr DN Road, Fort, Mumbai www.dws-india.com 91-22-66584300
IDBI Asset Management Ltd IDBI Building, Second Floor, Plot No. 39/40/41, Sector 11, CBD Belapur, Navi Mumbai www.idbimutual.co.in 91-22-66096100
DSP BlackRock Investment Managers Pvt. Ltd Tulsiani Chambers, West Wing, 11th Floor, Nariman Point, Mumbai www.dspblackrock.com 1800 200 4499 Edelweiss Asset Management Ltd 5th Floor, One Indiabulls Centre, Tower 1, Senapati Bapat Marg, Mumbai
IDFC Asset Management Co. Ltd One Indiabulls Centre, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road (W), Mumbai www.idfcmf.com 1800 226622 ING Investment Management (India) Pvt. Ltd 601/602, Windsor, Off CST Road, Kalina, Santacruz (E),
JM Financial Asset Management Pvt. Ltd 5th Floor, Apeejay House, 3, Dinsaw Vachha Road, Near KC College, Churchgate, Mumbai www.jmfinancialmf.com 1800-22-3132 JPMorgan Asset Management (India) Pvt. Ltd Kalpatru Synergy, 3rd Floor, West Wing, Santacruz (E), Mumbai www.jpmorganmf.com 1800 22 5763 Kotak Mahindra Asset Management Co. Ltd 3rd Floor, Nariman Bhawan, 229, Nariman Point, Mumbai www.kotakmutual.com 1800 22 2626 L&T Asset Management Ltd 27th Floor, Unit 1, Centre 1, World Trade Centre, Cuffe Parade, Colaba, Mumbai www.lntmf.com 91-22-61366600 LIC Mutual Fund Asset Management Co. Ltd 4th Floor, Industrial Assurance Building, Opposite Churchgate Station, Churchgate, Mumbai www.licmutual.com 91-22-22812038 Mirae Asset Global Investment Management (India) Pvt. Ltd Unit No. 606, Windsor Building, Off CST Road, Kalina, Santacruz (E), Mumbai www.miraeassetmf.co.in 1800 1020 777 Morgan Stanley Investment Management Pvt. Ltd Forbes Building, 5th Floor, Charanjit Rai Marg, Mumbai indiamf.morganstanley.com 1800 425 1313 Peerless Funds Management Co. Ltd Peerless Mansion, 1, Chowringhee Square, 3rd Floor, Kolkata www.peerlessmf.co.in 91-33-40185000 Principal PNB Asset Management Co. Pvt Ltd Exchange Plaza, 2nd Floor, National Stock Exchange Building, Bandra Kurla Complex, Bandra (E), Mumbai www.principalindia.com 1800 225 600
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Quantum Asset Management Co. Pvt. Ltd 505, 5th Floor, Regent Chambers, Nariman Point, Mumbai www.quantumamc.com 1800 22 3863 Reliance Capital Asset Management Ltd 11th and 12th Floor, One Indiabulls Centre, Tower 1, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road (W), Mumbai www.reliancemutual.com 1800 300 11111 Religare Asset Management Co. Ltd 3rd Floor, GYS Infinity, Paranjpe B Scheme, Subhash Road, Vile Parle (E), Mumbai www.religaremf.com 1800 209 0007 Sahara Asset Management Co. Pvt. Ltd 97-98, 9th Floor, Atlanta, Nariman Point, Mumbai www.saharamutual.com 91-22-67520121 SBI Funds Management Pvt. Ltd 191 E, Maker Tower, Cuffe Parade, Mumbai www.sbimf.com 1800 425 5425 Shinsei Asset Management (India) Pvt. Ltd 51, Harchandrai House, 81, Maharshi Karve Road, Marine Lines, Mumbai www.shinseifunds.com 1800 419 5000 Sundaram BNP Paribas Asset Management Co. Ltd Sundaram Towers, 2nd Floor, 46, Whites Road, Chennai www.sundarambnpparibas.in 1800 425 1000 Tata Asset Management Ltd Fort House, 221, Dr DN Road, Fort, Mumbai www.tatamutualfund.com 1800 209 0101 Taurus Asset Management Co. Ltd 305, Regent Chambers, 208, Jamnalal Bajaj Marg, Nariman Point, Mumbai www.taurusmutualfund.com 1800 180 9000 UTI Asset Management Co. Ltd UTI Tower, GN Block, Bandra Kurla Complex, Bandra (E), Mumbai www.utimf.com 1800 22 1230