Marketing Management

1) Define the different types of scheme’s floated by mutual fund’s briefly.

Types of Schemes

Mutual Funds primarily invests in Equity and Debt Markets and all their products are comprised of different proportions of their investments in these two markets as stated in offer document. Accordingly they are classified

1. Equity Schemes: Predominantly invests in Equity stocks and shares of Public Listed Companies.

2. Debt Schemes: Predominantly invests in Debentures, Bonds, Fixed Deposits, Sovereign Papers, Money Market instruments etc.

3 Balanced Schemes: Invests in both equity market and debt market in different propositions as stated in the document.

TYPESOFMUTUALFUNDSCHEMES

There are a wide variety of Mutual Fund schemes that cater to your needs, whatever your age, financial position, risk tolerance and return expectations. Whether as the foundation of your investment programme or as a supplement, Mutual Fund schemes can help you meet your financial goals?

(A) By Structure

1. Open-Ended Schemes :

These do not have a fixed maturity.You deal with the Mutual Fund for your investments and redemptions.The key feature is liquidity.You can conveniently buy and sell your units at Net Asset Value(NAV) related prices, at any point of time.

2. Close-Ended Schemes

Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called closeended schemes.You can invest in the scheme at the time of the initial issue and thereafter you can buy or sell the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchange could vary from the scheme’s NAV on account of demand and supply situation, unitholders’ expectations and other market factors. One of the characteristics of the close-ended schemes is that they are generally traded at a discount to NAV; but closer to maturity, the discount narrows.

Some close-ended schemes give you an additional option of selling your units to the...