SBI Mutual Fund

BENEFITTING FROM MUTUAL FUNDS

A simple and easy way to understand guide

An investor education initiative by 

An investor education initiative by SBI Mutual Fund

SBI Funds Management is a joint venture between State Bank of India, the country’s largest bank and Societe Generale Asset Management (France), one of the world’s leading fund management companies. With over 20 years of rich experience in fund management, SBI Funds Management Pvt. Ltd. Is one of the largest investment management firms in India managing investment mandates of over 58* lakh investors. With over a network of over 200points of acceptance spread across India our vast family of investors is expanding faster and further. It is the trust of over58 lakh investors that eggs us on to deliver innovative and stable investment services, day after day. It is the driving force of our team of investment experts to develop and deliver products that help investors like you achieve their financial objective.

*58 lakh investors calculated on the basis of live folios as on July, 31, 2010

Benefitting from Mutual Funds

It is beyond doubt, that within a few years mutual funds have emerged as a major tool for ensuring one’s financial well-being.  Mutual funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. As information and awareness is rising, more and more of people are enjoying the benefits of investing in mutual funds.

One of the reasons why mutual funds have become so popular with the common Indian investor is because it has opened a new avenue of investing their small savings more fruitfully. It is beyond doubt that mutual funds are an essential investment for fulfilling one’s dreams. If used with the right expert, it is the best way to make money work for you.

Knowing how to secure your financial well-being is one of the most important things you’ll ever need in life. With mutual funds on your side you can achieve it with relative ease. Mutual funds fit well into either a long-term or a short term investment strategy. So you can invest for your retirement, child’s education or marriage and more. Or you can invest for your more immediate needs like repaying a loan, making down payments, etc. More importantly, by investing in mutual funds you can create wealth over the long term.

We hope, with this guide, you will learn more about mutual funds and eventually it will help you benefit from investing in them. Take your time reading through it. It will give you enough information to help you familiarize with the concepts, benefits, the process and different types of mutual funds. Of course at the end of it you would like to more, feel free to contact your nearest investor Service  Center or Investor Service Desk. You may also log on to www.sbimf.com or call us on our toll-free number 1800 425 5425.

So what exactly is a mutual fund

Firstly when you invest in a mutual fund you are not alone. There are other like-minded investors like you who want their money to work harder for them. But at the same time, want a professional to do it for them. When you invest in a mutual fund, your money is collected in a common pool along with the money of other investors who share a common investment goal like you. The Mutual Fund Manager or Fund Manager then invests the pool of money, also known as corpus, in securities ranging from shares, debentures and money market instruments. The income earned through investments by these is then shared by means of dividend or capital appreciation by the investors in proportion to the investments made by them. Thus a mutual fund provides you an opportunity to invest in diversified professionally managed basket of investment opportunities at a relatively low cost.

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Investing in mutual fund has its benefits.

You get expert guidance.

A mutual fund,  like your SBI Mutual Fund, has professionals whose constant job is to study the financial market for you. They research and analyse market trends and prospects of various sectors and companies. Something that is difficult for you to do alone. So, when it comes to making the right investment decision, you can be sure that your money is being invested by experts.

Reduced risk. Optimum returns.

By nature, a mutual fund is multiple investment opportunities bundled into one. Normally returns on investments from a single security depend on how well or how poorlythe company fares. But with mutual funds your money is invested across different companis and sctors. By doing this your investment returns get avraged. This means, ven if to investments go bad other investments may average your returns.

You can have money when you want it.

If you invst in an open-ended mutual fund, you can claim your money at net asse value (NAV) related prices from the mutual fund itself on any business day. On the other hand, if you invest in a close-ended scheme, you can sell your units at the prevailing market rate on the stock exchange where it is listed.

It is an affordable investment opion.

Since you invest with several other investors, you bear lesser investing costs than you would have to if you did it alone. So, as compared to investing directly in the capital market, mutual funds cost less.

The complete process is trnsparent.

Unlik some investment in property, you get to know the value of your investment on a regular basis. In addition to it , you can also know the investments that have been made by your scheme, the proportion allocated to different assets and the Fund Manager’s investment strategy on a prdic basis.