1. MUTUAL FUNDS
KAUSHIK RAJA
Pondicherry University - MBA

2. What is Mutual Fund
A Mutual Fund is an investment
tool that allows small investors
access to a well-diversified portfolio
of equities, bonds and other
securities.

4. Why Mutual Fund
 Expertise
 Diversification
HISTORY
The mutual fund industry in India started in 1963
with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve
Bank.

5. Segmentation
Two segments
1) Do-it-yourself - Portfolio
Management [software
that improves trade
execution, hiring skilled
analysts]
2) Broker services – [hiring
client service personnel
dedicated to supporting
broker inquiries, less in
portfolio management ]

6. How companies promote their
products
 Certified Agents [Sale and
Distribution] - Certification
from the National Institute
of Securities Market
(NISM) by passing their
certification examination
'NISM Series V-A : Mutual
Fund Distributors
Certification Examination'.
 Service Centres
 Company web portal
 Little promotion in print
media

7.  Outdoor advertising through large size Bill
Boards/Hoardings
 Retail Bank - the reputations of the banks were
also stated to have played a key role in
popularizing Mutual Fund
 90% of the customers said that they would
prefer to buy Mutual Fund Products from banks
due to existing personal relationship with banks.

13. Awards and Ratings
 CNBCTV 18 – CRISIL
 ICRA – Indian Credit Rating Agency

14.  Thomson Reuters & Lipper
 NDTV Profit

15.  Morning Star

16. SEBI Guidelines
 Refrain from using
exaggerated or
unwarranted claims,
superlatives and
opinions
 While advertising pay-
out of dividends, it shall
be disclosed that after
the payment of the
dividend

17. FORMS OF ADVERTISEMENTS
Tombstone Advertisement:
A fund which is already launched and is
in existence
 Allowed - Name of the mutual
fund, Assets Management
Company, Scheme classification (i.e.
income/growth etc.,), Logo or
trademark, Invitation to inquire for
further information, Entry and exit
loads.
 Prohibited - Performance of the
fund, Promise of any
returns, Comparisons and usage of
ranking given by a third party.

18. Product Launch Advertisement:
Launch and re-launch of
funds/schemes
 Must Have – Name of the Fund, the
Asset Management Company, Scheme
classification (i.e. income/growth etc.,),
Investment objective, Investor
benefits, general services offered,
Logo, corporate symbol, if any, Risk
factors as stated in the offer document,
Entry and exit loads applicable.
 Prohibited - Performance figures of
any of the previous schemes,
comparisons with any other
funds/schemes, and rank by any
ranking agencies.

19. Advertisements through Hoardings / Posters
 “Mutual Fund investments are subject to market
risks, read the offer document carefully before
investing”.
 The above statement shall be displayed in black
letters of at least 8 inches height or covering
10% of the display area, on white background.

20. Advertisements through Audio-Visual
Media
 “Mutual Fund investments
are subject to market
risks, read the offer
document carefully before
investing”
 Shall be displayed for at
least 2 seconds
 Covering at least 80% of
the total screen space and
accompanied by a voice-
over reiteration.

22. Why people don’t invest in
Mutual Fund in General
1) Ignorance
Nine in ten people with
incomes in India do not
know that mutual funds
exist.
If people came to know
then 1 in 5 people invest
in Mutual Fund
2) Averse to risk taking

23. 3) AMCs and
distributors have a
limited focus
beyond the top 20
cities
4) No distinction
between Mutual
Funds and direct
stock market
investments

24. 5)The Indian mutual fund
industry has largely been
product-led and not sufficiently
customer focused.
6)The industry has had a
limited focus on innovation and
new product development
Products that cater specifically
to customer life stage needs
such as education, marriage,
and housing are yet to find
their way in the Indian market.

25. 7)Limited Focus of the Public
Sector Network on Distribution of
Mutual Funds.
8)Regulation of Mutual Funds than
its competing products
 ULIPs which are deemed to be
competing products do not have
the mandatory PAN requirement.
 While the payment for investment
into mutual funds can be made
only through banking facilities, the
purchase of ULIPs can be
undertaken through cash.

26. 9) Mutual fund industry in US
spends $6 billion a year on
advertising.
 Mutual fund industry in India
spends around 200 crore
rupees on advertising.
 Reason: Institutional
segment comprises more
than 60 % AUM (Assets
Under management) share

27. CASE STUDY:
Fidelity Investments
 It was founded in 1946 and serves North
American investors.
 The company's largest equity mutual fund is
Contrafund, which has more than $68 billion in
assets
 FIL's offices include asset management
companies in 10 locations
 offices in 23 countries, employing more than
4,000 people

28. Why Fidelity
At Fidelity you are with a
leader:
 Morningstar Highly
rated Funds
 No load, no
transaction fees
 Guidance with free
portfolio planning

29. How It Works

34. Personalization
 Help Americans assess their financial situations
and map out a savings plan based on their
specific needs and goals.

35. Marketing Campaign - Turn Here
 The new campaign, created by Fidelity's internal
advertising agency in partnership with Boston-
based Arnold Worldwide

39. Fidelity Charitable
 Independent Public
charity
 Since 1991, Fidelity
Charitable has helped
donors support over
150,000 non profit
organizations
with more than $12
billion in grants.
 Fidelity Charitable
donors made more
than $1.3 billion in
2011.

40. Reference
 www.piperjaffray.com/pdf/understandingmutualfundpri
cing.pdf
 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=17
13940
 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=14
74955
 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=14
72156
 http://papers.ssrn.com/paper.taf%3FABSTRACT_ID%3
D239851
 http://www.mutualfundsindia.com/
 www.pwc.com/in/en/assets/pdfs/industries/towards-
2015-141211.pdf
 www.mutualfundsummit.com/image/pdf/MF_09_Broch