Weekly Report

On
UTIMutual fund
Submitted to

Phoenix International
Business School, Udaipur
By
Aviral Mathur
1 |Page
 Masters of Business Administration
(MBA)
25april-29april
Context
S.n Topic Page
o. no.
1. Concept of Mutual Fund 3
2. Mutual Fund Operation Flow 4
Chart
3. Organisation Chart of Mutual 4
fund
4. Advantage of Mutual Fund 5
5. Type of Mutual fund scheme 6
6. UTI Mutual Fund Overview 7
7. Learning & Developments 12
8. Taxation for Mutual funds 15
9. Other 16

2 |Page
 Mutual Fund
Mutual fund is a trust that pools the savings of a number of investors who share Common
financial goal. The money thus collected is then invested in capital market instruments such
as shares, debentures and other securities.
A Mutual fund is a mechanism for pooling the resources by issuing units to the investors and
investing funds in securities in accordance with objectives as disclosed in the offer
document. Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost.

3 |Page
The profits or losses are shared by the investors in proportion to their investments. The
mutual funds normally come out with a number of schemes with different investment
objectives which are launched from time to time.
A mutual fund is required to be registered with Securities and Exchange Board of India
(SEBI) which regulates securities markets before it can collect funds from the public.
Investments in securities are spread across a wide cross-section of industries and sectors and
thus the risk is reduced. Diversification reduces the risk because all stocks may not move in
the same direction in the same proportion at the same time. Mutual fund issues units to the
investors in accordance with quantum of money invested by them. Investors of mutual funds
are known as unit holders.

Mutual Fund Operation Flow Chart

Investor

Pass back to Investor Pool their Money with

4 |Page
 Return
Fund
s
manager

Generate Invest In

Securities

Organisation Chart of Mutual Fund

Unit Holder

Sponsors

Trustee AMC

Mutual Fund Transfer Agent

Custodian

SEBI

This Diagram shows that how much entity involved in Mutual fund

What is advantage for people in Mutual Fund Investment?

5 |Page
Mutual fund is very popular investment vehicle for investors. Their simplicity along with
other attributes provides great benefit to investors with limited knowledge, time or money.
Some benefit is mentioned below:

✔ Diversification: The best mutual funds design their portfolios so individual

investments will react differently to the same economic conditions. For example,
economic conditions like a rise in interest rates may cause certain securities in a
diversified portfolio to decrease in value. Other securities in the portfolio will
respond to the same economic conditions by increasing in value. When a portfolio is
balanced in this way, the value of the overall portfolio should gradually increase over
time, even if some securities lose value.
✔ Professional Management: Most mutual funds pay topflight professionals to manage
their investments. These managers decide what securities the fund will buy and sell.
✔ Regulatory oversight: Mutual funds are subject to many government regulations that
protect investors from fraud.
✔ Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a
call, and you've got the cash.
✔ Convenience: You can usually buy mutual fund shares by mail, phone, or over the
Internet.
✔ Low cost: Mutual fund expenses are often no more than 1.5 per cent of your
investment. Expenses for Index Funds are less than that, because index funds are not
actively managed. Instead, they automatically buy stock in companies that are listed
on a specific index
✔ Return Potential
✔ Transparency
✔ Flexibility
✔ Choice of Scheme
✔ Tex Benefits
✔ Well Regulated

6 |Page
 ✔ Economies of Scale
✔ Divisibility

How many types of Mutual Funds scheme available in present market?

Wide varieties of Mutual Fund Schemes exist to cater to the needs such as financial position,
risk tolerance and return expectations.

BY STRUCTURE

OPEN ENDED SCHEME

CLOSE ENDED SCHEME

INTERVAL SCHEME

BY INVESTMENT OBJECTIVE

GROWTH SCHEME

INCOME SCHEME

BALANCED SCHEME

MONEY MARKET SCHEME

OTHER SCHEME

TAX SAVING SCHEME

7 |Page
SPECIAL SCHEME

SECTOR SPECFIC SCHEME

 INDEX SCHEME

UTI MUTUAL FUND OVERVIWE

VISION

To be the most Preferred Mutual Fund.

MISSION

✔ The most trusted brand, admired by all stakeholders

✔ The largest and most efficient money manager with global presence
✔ The best in class customer service provider
✔ The most preferred employer
✔ The most innovative and best wealth creator
✔ A socially responsible organisation known for best corporate governance

CREAMY PRODUCT AT UTI

UTI-Equity Fund (An open end equity scheme)

✔ Objective to securing unitholders capital appreciation by investing the fund of

scheme in equity share and convertible & non-convertible bonds/debenture of good
growth companies
✔ Growth option and Dividend option with Payout and Reinvestment available
✔ SIP, STRIP, and Automatic Trigger facilities are available
✔ Minimum amount of initial investment is RS.5000/-
✔ Benchmark Index is BSE-100
✔ Assets allocation In Equity and Equity Related at least 80%
✔ In Debt & Money Market Instrument upto 20%
✔ Inception date is 18th May 1992

UTI-Master Value Fund (An open end equity oriented scheme)

✔ Objective of the scheme is capital appreciation through investment in stocks that are
relatively undervalued to their long term earning growth

8 |Page
 ✔ Assets allocation upto 80% will invest in Low P/E Ratio, Attractive dividend yield,
Low price to book value ration Or companies with positive economic value Added
✔ Upto 20% of Net Assets will invest in Equity & Equity Related Instrument
✔ Growth option and Dividend option with Payout and Reinvestment available
✔ SIP, STRIP, and Automatic Trigger facilities are available
✔ Minimum amount of initial investment is RS.5000/
✔ Benchmark Index is BSE-200
✔ Inception date is 1st July 1998

UTI-Dividend Yield Fund (An open end equity oriented scheme)

✔ Objective of the scheme is to provide medium to long term capital gains or dividend
through investing in equity and equity related instrument, which offer high dividend
yield
✔ Allocation of assets In high dividend yield equity is about 65-100%
✔ In other equity and equity related instrument 0-35%
✔ In Debt & money market instrument 0-10%
✔ Growth option and Dividend option with Payout and Reinvestment facilities available
✔ SIP, STRIP, and Automatic Trigger & UTI STRIP Advantage facilities are available
✔ Minimum amount of initial investment is RS.5000/-
✔ Benchmark Index is BSE-100
✔ Inception Date is 3rd May 2005

UTI-Opportunity Fund (An open end equity oriented scheme)

✔ Objective to generate capital appreciation and income distribution by investing the

funds in the scheme in equity and equity related instrument. Main focus of the
scheme is to capitalized on opportunities arising in the market by responding to the
dynamically changing in Indian economy or change in trends
✔ Allocation of assets In Equity 90-100%
✔ In Debt Instrument & money market instruments 0-10%
✔ Growth option and Dividend option with Payout and Reinvestment available
✔ SIP, STRIP, and Automatic Trigger facilities are available
✔ Minimum amount of initial investment is RS.5000/
✔ Benchmark Index is BSE-100
✔ Inception date is 20th July, 2005

9 |Page
UTI-Banking Fund (An open end equity oriented scheme)

✔ Objective is capital appreciation through investing in the stocks of the companies/

institution engaged in the banking and financial sector
✔ Allocation of assets In Equity atleast 90 %
✔ In Equity banking services atleast 65%
✔ In Cash/money market instrument upto 10%
✔ Regular plan and Institutional plan available ( Both plan offer Growth option and
Dividend option with Payout and Reinvestment available )
✔ SIP( available under regular plan only), STRIP( available under regular plan only)
and Automatic Trigger facilities are available
✔ Minimum amount of initial investment is RS.5000/ ( under regular plan only)
✔ Minimum amount of initial investment is 5crore (under institutional plan)
✔ Benchmark Index S&P BANKS Index
✔ Inception date is 7th April, 2004

UTI-Unit Linked Insurance Plan

✔ Objective of the scheme is primarily to provide return through growth in NAV or

through dividend distribution and reinvestment thereof.
✔ Scheme is open for investor to resident individuals as well as to NRIs including
investment in the name of the spouse/child. Age of applicant should be within age
limit mentioned below:
(a) The 10 years plan between the age of 12 and 55 ½ years
(b) The 15 years plan between the age of 12 and 50 ½ years
✔ Two plan are available for the investor 10 years plan or 15 years plan with the
option of declining term insurance cover and fixed term insurance cover
✔ This scheme offer subscription and redemption of units on every business day
✔ Benchmark CRISIL Debt Hybrid (60:40)
✔ Inception date is 1st 0ctober, 1971
✔ In that scheme 2% Exit load for premature withdrawal
✔ Minimum amount of initial investment is Rs. 15000/
✔ Maximum amount of investment is Rs. 1500000/- ( Investor can invest more then
1500000/- of amount in one or more than one instalment but life insurance cover
will not exceed from 1500000/-)
✔ This scheme will provide Personal accident insurance cover of Rs. 50000/-,
irrespective of the target amount chosen or the number of investment made in the
scheme

10 | P a g e
 ✔ Ulip scheme come under the Income Tax Benefits , amount of investment is fully
exempt
✔ Minimum investment instalment Rs. 500 monthly or Rs. 1500 quarterly
✔ Minimum amount of investment under the plan of 10 years is Rs. 60000/-
✔ Minimum amount of investment under the plan of 15 years is Rs. 90000/-
✔ Allocation of assets in equity 40% max.
✔ In debt and related instrument 60%

UTI-Children Career Plan (An open end scheme)

✔ Objective to invest fund in equities, convertible and non-convertible debenture/bonds

of companies/corporates and other capital & money market instrument subject to
condition
✔ Allocation of assets In equities 70-100%
✔ Debts and money market instrument 60-100%
✔ Investment in securities debt will not normally exceed 20% of the net assets
✔ SIP, STRIP facilities are available
✔ Scheme is open for resident or a NRI child up to the age of 15 years
Some applicable entity mention below:
(a) A resident/NRI individual not being a minor
(b) A court-appointed guardian of a child
(c) An eligible trust as define under the scheme
(d) A body corporate(expect co-operative societies) including a company formed
under the company Act, 1956 and a bank
✔ Growth option, Dividend option and scholarship
✔ Benchmark CRISIL Balanced Fund Index
✔ Net Assets Value (NAV) will be calculated and declared on every day basis
✔ Entry load is NIL but Exit Load is 4% (if less than 1yr) 3% (if Greater than or equal
to 1yr & less than 3yrs) 1% (if Greater than or equal to 3yrs & less than 5yrs) Nil (if
Greater than or equal to 5yrs)
✔ Minimum Initial investment isRs.1000/-
✔ Tax Benefit under the scholarship option of both the plans, scholarship is paid to the
beneficiary after he/she attains age of 18 yrs to meet cost of his/her education. The
scholarship granted to meet the cost of education does not from part of the total
income of the beneficiary under section 10(16) of the income Tax Act,1961

11 | P a g e
 ✔ Why to invest in UTI-CCP?
-To get scholarship or lump sum amount
-To manage higher education expenses
-To establish or set up new business
-To buy a house
-To pay other liabilities

UTI –Mahila Unit Scheme

✔ Objective of the scheme is to invest in a portfolio of equities/equities related

securities and debt and money market instrument with a view to generate reasonable
income with moderate capital appreciation
✔ This scheme is open for the benefit of resident and NRI female person who have
completed 18 yrs of age
✔ In that scheme Growth option and Dividend option (with facility for reinvestment of
dividend)
✔ The scheme will offer subscription and redemption of units on every business day on
an on-going basis
✔ Benchmark CRISIL Debt Hybrid (75:25)
✔ Minimum investment in that scheme is Rs. 5000/- (in case of dividend option) and
Rs. 1000/- (in case of growth option)
✔ Entry load is NIL But Exit load is as follows:
 <1year-3%
 >=1year- < 5years-2%
 >=3years- < 5years-1%
 >=5years-NIL
✔ Why to invest in UTI Mahila Unit Scheme?
UTI Mahila Unit Scheme is exclusively designed for women above 18 years of
age with a view to making them financially independent. The scheme tries to
empower Indian women financially and to provide them support to lead a life in
their own way

12 | P a g e
 ✔ Why should invest in UTI-MUS?
-One of the most consistence performers under Debt oriented fund.
-maintains a fine balance between Debt & Equity
-Lower volatility of returns
-Well diversified and actively managed portfolio
-Ranked consistently as a five star fund by value research

**Mutual fund schemes are subjected to market risk. Please read

offer document before investing**

Learning & Development

Terminology used in Mutual fund

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per
unit NAV is the net asset value of the scheme divided by the number of units outstanding on
the Valuation Date.

Sale Price

Is the price you pay when you invest in a scheme, also called Offer Price. It may include a
sales load.

Repurchase Price

Is the price at which units under open-ended schemes are repurchased by the Mutual Fund.
Such prices are NAV related.

13 | P a g e
Redemption Price

Is the price at which close-ended schemes redeem their units on maturity. Such prices are
NAV related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load.
Schemes that do not charge a load are called ‘No Load’ schemes.

Repurchase or ‘Back-end ‘Load

Is a charge collected by a scheme when it buys back the units from the unitholders.

Other Learning

What is SIP?

A systematic Investment plan is a disciplined approach of investing in MF scheme. Where

one can make regular investments according to pre opted schedules.

What is mean by STRIP?

Systematic Transfer investment plan is a facility wherein investor can opt to transfer a fixed
amount at regular intervals from one designated scheme to another designated scheme of
UTI mutual fund.

What is Trigger in mutual fund?

Trigger is an event on happening of which the Fund will automatically redeem and/or switch
the units on behalf of the investors on the date of happening of the event. A trigger will
activate a transaction/alert when the event selected for, has reached a value greater or less
than the specified particular value (trigger point). Four type of Trigger are given below:
-Value Trigger
-Appreciation Trigger

14 | P a g e
-Data Trigger
-Stop-loss Trigger

What is SWP?

A service offered by a mutual fund that provides a specific payout amount to the shareholder
at predetermined intervals, generally monthly, quarterly, semi-annually or annually.

What is mean by Entry Load in mutual fund scheme?

Mutual Fund Companies incur some expenses to float a fund and also they have many
administrative and operative expenses. So to meet those expenses they collect a percentage
of fees from the investors that are called loads. Entry load are those charges which is levied
on investor when he buy any mutual fund from distributor companies.

What is mean by Exit load in mutual fund scheme?

Exit load is the charge which is levied by AMC in case of the investor exit from the scheme
it can verify from time to time. If you exist early you will have to pay higher exit load which
can be less in case you stay with the scheme for long time.

What is mean by Benchmark Index?

When the market rises or falls, the fund will be impacted. However, the degree of impact
varies from fund to fund. Let's consider a diversified equity fund that has benchmarked itself
against the Sensex. In the simplest case, if the fund does better than Sensex, it has
outperformed the benchmark and vice-versa.

Commercial Paper (CP)

Commercial Paper (CP) is an unsecured money market instrument issued in the form of a
promissory note. CP as a privately placed instrument was introduced in India in 1990 with a
view to enabling highly rated corporate borrowers to diversify their sources of short-term
borrowings and to provide an additional instrument to investors. Subsequently, primary
dealers and satellite dealers were also permitted to issue CP to enable them to meet their
short-term funding requirements for their operations. Guidelines for issue of CP are presently
governed by various directives issued by the Reserve Bank of India, as amended from time
to time.

15 | P a g e
Commercial Deposits (CD)
A certificate of deposit is a promissory note issued by a bank. It is a time deposit that
restricts holders from withdrawing funds on demand. Although it is still possible to withdraw
the money, this action will often incur a penalty. A Commercial Deposit Bonds is not
insurance, but rather a form of financial instrument or guarantee which can represent your
deposit until settlement when buying a commercial property. (Ie any property with non-
residential zoning).
When purchasing a property, it is common practice to lodge a cash deposit of up to 10% of
the purchase price with the vendor’s solicitor as security. For a small fee, a Commercial
Deposit Bond can be used in lieu of the cash deposit. It guarantees the Vendor that you will
pay your deposit on the day of settlement.
The Deposit Guarantee Bond can be used for all or part of the deposit required up to a
maximum of 10% of the purchase price. Commercial Deposit Bonds are usually offered for
terms of 3 months - 3 years

Know Your Client (KYC)

KYC is kind of identification document for mutual fund investor. KYC is applied by govt. to
stop black money investing in Mutual fund Scheme. For making of KYC every investor will
give his/her PAN Number and by the use of PAN number Govt. can track any transaction.
Registrar of UTI AMC
Karvy Computershare Pvt.Ltd.
Karvy’s Work at UTI AMC, Ajmer
✔ Redemption/ withdrawal of mutual fund
✔ Rectification in bank details
✔ Rectification in Address
✔ Purchase of new mutual fund unit
✔ Time stamping
✔ Bar code
✔ Entries of Bar Code in system
✔ Uploading document in System
✔ Processing
✔ Mentioning IH (InHouse) Number
I have learnt many of things during this week with the special reference of Karvy
Computershare. I learnt how to do redemption of mutual fund on maturity or before

16 | P a g e
 maturity. Switching of one scheme to another scheme, Renewal of Schemes, importance
of punching and bar code for Karvy ’system and how registrar do their work at UTI
AMC.
Tax Treatment for Mutual Fund Investor

In the case of Equity Oriented Scheme:

-Long term capital gain is exempt

-Short term capital gain is taxable @ 15
-If net income more than 10lac for individual than:
Short term tax =15%+10%surcharge+3%cess
-Received Dividend is exempt
-Tax on capital gain at the time of redemption is exempt
-Security transaction tax is 0.25 % on repurchase of units

In the case of Debt Oriented Scheme:

-Tax on long term capital gain is 20% (with indexation) or 10% (without indexation)
-In net income more than 10 lac for individual
Capital gain tax+10%surcharge+3% chess
-Short term gain tax is as per the investor’s slab
-Received Dividend is exempt

Exemption of tax on investment in mutual fund scheme:

-If invested in Equity linked saving scheme, Unit linked insurance scheme and
notified pension fund upto Rs.100000/-
-Dividend is available from total income only to individual or an HUF
-On other scheme which are coming under income tax act 80C

Set off of capital gain and losses:

-Long term capital gain from equity is exempt

-Long term capital loss will not set off
-Capital loss, long term or short term cannot be set off against any other head of
income

17 | P a g e
Wealth Tax and Gold Gift Tax:

-Investment in mutual fund is exempt from wealth tax

-UTI GOLD EFT units are also exempt from wealth tax
-Gift of units is exempt upto Rs. 50000/-

Bank Rate
-Bank rate is the rate at which central Bank of country ( RBI) allow to finance to
commercial banks. Bank Rate is a tool, which central bank use for short-term purpose.
CRR
-CRR means cash reserve ration. Bank in India are required to hold certain amount of their
deposits in the form of cash. CRR is money market instrument used by RBI to control
liquidity in banking system.
SLR
- SLR stands for statutory liquid ration. This term used by banks that indicated that
minimum amount of their deposits that banks need to hold in form of gold , cash and other
approved security. Its regulates the credit growth in India
Repo and Reverse Repo Rate
- Repo rate is the rate at which the RBI lend short term money to banks. When repo rate
increase than borrowing from RBI becomes very expressive. Similar when it reduce than
borrowing from RBI becomes very cheaper.
Reverse Repo rate is the rate at which banks park their short term excess liquidity to RBI.
RBI use this tools when feels so much money floating in banking system. An increase in rate
means that RBI will borrow money from higher rate of interest. As result bank will prefer to
keep their money to RBI.
Exchange Rate
-Exchange rate is the rate at which one currency converted into another currency in foreign
exchange market. Wide type of factor influence the exchange rate, such as interest rate,
inflection, state of policy, economy in the country,
Above mention all things, which I have studied here in last five days. I am giving my
best to adopt new things. I have exposed mutual fund industry in a week.I am also
seeking for some topics but not getting that, I am requesting you to make me
understand that topics which are mentioned below.
1. Dry Capital
2. Money Lending and Money Lending Act

18 | P a g e
 3. Deposits Rate
4. Base Rate
5. Saving bank rates
6. Alfa (in finance)
7. Beta (in finance)

19 | P a g e