Open - Ended Schemes

These do not have a fixed maturity. You deal directly with the Mutual Fund for your investments and redemption's. The key feature is liquidity. You can conveniently buy and sell your units at net asset value ("NAV") related prices.


Close-Ended Schemes

Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called close-ended schemes. You can invest directly 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, unit holders' 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 directly to the Mutual Fund through periodic repurchase at NAV related prices SEBI regulations ensure that at least one of the two exit routes are provided to the investor.


Growth Schemes

Aim to provide capital appreciation over the medium to long term. These schemes normally invest a majority of their funds in equities and are willing to bear short-term decline in value for possible future appreciation.

These Schemes are not for investors seeking regular income or needing their money back in the short-term

• Investors in their prime earning years.
• Investors seeking growth over the long-term.

Aim to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures.

Capital appreciation in such schemes may be limited.

Ideal for

• Retired people and others with a need for capital stability and regular income.
• Investors who need some income to supplement their earnings.

Aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. They invest in both shares and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls.

Ideal for

• Investors looking for a combination of income and moderate growth.

Aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills certificates of deposit, commercial paper and inter bank call money. Return on these schemes may fluctuate, depending upon the interest rates prevailing in the market.

Ideal for

• Corporate and individual investors as a means to park their surplus funds for short periods or awaiting a more favourable investment alternative.

These Schemes offer tax rebates to the investors under tax laws as prescribed from time to time. This is made possible because the Government offers tax incentives for investment in specified avenues. For example, Equity Linked Savings Schemes (ELSS) and Pension Schemes.

Recent amendments to the Income Tax Act provide further opportunities to investors to save capital gains by investing in Mutual Funds. The details of such tax savings are provided in the relevant offer documents.

Ideal for

• Investors seeking tax rebates.

NRIs & OCB s are permitted to invest in units of Mutual Funds floated by private/ public sector financial institutions with right of repatriation provided investment is made either by way of direct foreign remittance or from funds in FCNR accounts.

Sai securities will assist you in selecting investment according to your investment objectives and they keep regular track of the working results of various open ended, close-ended Mutual Funds based on equity, balanced or debt schemes.


What is a Mutual Fund ?

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. These investors by units of a particular Mutual Fund scheme that has a defined investment objectives and strategy.

The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme's stated objective. The income earned through these investments and the capital appreciation realised by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a 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.



Why Should you Invest in Mutual Funds?

1. Diversification.

Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own.


2. Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and unnecessary follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient.


3. Return Potential

Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities.


4. Liquidity

In open-ended schemes, you can get your money back promptly at net asset value related prices from the Mutual Fund itself. With close-ended schemes, you can sell your units on a stock exchange at the prevailing market price or avail of the facility of direct repurchase at NAV related prices which some close-ended and interval schemes offer you periodically.


5. Transparency

You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook.


6. Flexibility

Through features such as regular investment plants, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience.


7. Choice of Schemes

Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.


8. Well Regulated

All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.


The various schemes of a Mutual Fund is as below :

• Open - Ended Schemes
  
• Close Ended Schemes
  
• Growth Schemes
  
• Income Schemes
  
• Balanced Schemes
  
• Money Market Schemes
  
• Tax Savings Schemes