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To be able to honestly call yourself a distributor, it is necessary to ensure all your skill sets are in place. UTI MF thus wishes to share some information to build on these skills and groom you to be able to take on the responsibility successfully.

Checklist for sales Application
Ensure that:

  • The investor's name and address is given in full.
  • All PAN and UIN under MAPIN database are given (wherever relevant); failing the application will be rejected.
  • The bank account details including 9-digit MICR code are entered completely and correctly. This is mandatory.
  • The preferred option is selected. For example, 'growth', 'income', etc.
  • The investment is not less than the minimum investment amount along with the scheme's name, option and plan specified clearly.
  • The application is completed and signed by all applicants.
  • The cheque / draft is in the name of the scheme. For example, 'UTI-Mastershare.'
  • On the reverse of each cheque submitted, the Application Form number is written.
  • Only one cheque is attached with one application. Multiple applications with single cheque or single application with multiple cheques is liable to be rejected.
  • The accurate documents are submitted along with the application form.
  1. Copy of the PAN card, duly self-attested or attested by an agent. In case there is more than one holder, then copies of PAN card of the joint holders are also required.
  2. Copy of KYC acknowledgement – In case the investment amount is Rs. 50,000/- or above. KYC acknowledgement should be submitted for all the holders.

Note: Agents are requested to mention their 'broker code' in the broker code box and 'sub-broker code' in the sub-broker code box, wherever applicable.
Checklist for Redemption
  • Signature of the holder
  • Bank details
  • Full address with Pin code
  • In case of thumb impression, it should be attested by bank.
  • In case of non-individuals, the following documents should be submitted.
  • MOA (Memorandum or Association)
  • Article of Association
  • Signature of authorized signatory
  • Board resoluton for disinvestment
Instructions for Systematic Investment Plan
General Instructions

  1. SIP/Micro SIP is offered with following periodicity:
    • a. Monthly Systematic Investment Plan (MSIP) and
    • b. Quarterly Systematic Investment Plan (QSIP).
  2. Both the options (MSIP and QSIP) can not be mingled. Separate Enrolment Forms needs to be filled in for MSIP and QSIP.
  3. Please submit SIP/ Micro SIP Mandate Form at least one month before the first installment date. The forms that are received within the period of one month before the first installment date, will be considered from the date of the following month/ quarter, as per the date (1st/7th/15th/25th)opted by the investor.
  4. The minimum amount of each investment for SIP/Micro SIP is Rs. 500/- (for monthly option) and Rs. 1,500/- (for quarterly option) for all the schemes. Minimum Application Amount, as specified in the respective SID of the schemes of UTI Mutual Fund is not applicable in the case of transaction through SIP.
  5. There is no stipulated period up to which a SIP/Micro SIP can be under operation. The SIP/Micro SIP will continue until further notice from the investor.
  6. Units Allotment: Units will be allotted at NAV- based purchase price declared on the applicable dated i.e. 1st or 7th or 15th or 25th of the month/ quarter. In case the date falls on a non-business day or during a book closure period, the immediate next business day will be taken into account for the purpose of determining the price. The applications will be accepted at all official points of acceptance of acceptance of UTI AMC. Outstation cheque will not be accepted.
  7. Account Statement: An Account Statement will be sent to the unit holder through e-mail.
  8. Investors can choose to discontinue this facility by giving one month written notice to the scheme's Registrar.
  9. Investors will not hold UTI Mutual Fund or its service providers responsible if the transaction is delayed or not brought into effect / affected or the investors' bank account is debited in advance or after the specific SIP date due to various clearing cycles of ECS / local holidays.
  10. Investors will not hold UTI Mutual Fund or its service providers responsible for non-allotment of units for SIP / Micro SIP if the payment is not received from the unitholder's bank for various reasons.
  11. UTI Mutual Fund or its other service providers shall not be responsible or liable for any damages/compensation for any loss, damage, etc. incurred by the investors. The investors assume the entire risk of using this facility and take full responsibility.
  12. UTI Mutual Fund reserves the right to reject SIP/Micro SIP or auto-debit mandate without assigning any reasons thereof; for Micro SIP only.
  1. Applicability and Transactions covered:
    • Systematic Investment Plans (SIP's) where aggregate of installments in a rolling 12-month period or in a financial year i.e. April to March does not exceed Rs. 50,000 will be covered (to be referred as "Micro SIP" hereinafter).
    • This exemption will be applicable ONLY to investments by individuals (including NRI's but not PIO's) and minors. HUF's and other categories will not be eligible for Micro SIP's.
    • The exemption is applicable to joint holders also.
  2. Procedure:
    • Micro SIP will be handled by the Registrars of the scheme.
    • Investors (including joint holders) will submit a photocopy of any one of the documents identified in 'Para 3' along with Micro SIP applications.
    • Supporting documents must be current and valid.
    • Supporting document copies shall be self-attested by the investor/attested by the ARN holder mentioning the ARN number.
    • While making subsequent Micro SIP applications, investors can quote the existing folio number where a Micro SIP has been registered and therefore need not resubmit the supporting document.
  3. Any one of the following Photo Identification documents can be submitted along with Micro SIP applications as proof of identification in lieu of PAN.
    • Voter Identity Card.
    • Driving License
    • Government/Defense identification card
    • Passport
    • Photo Ration Card
    • Photo Debit Card (Credit Card is not allowed)
    • Employee ID cards issued by companies registered with Registrar of Companies (database available in the following link of Ministry of Company Affairs
    • Photo Identification issued by Bank Managers of Scheduled Commercials Banks/Gazetted Officer/Elected Representatives to the Legislative Assembly/Parliament
    • ID card issued to employees of Scheduled Commercial/State District Co-operative Banks.
    • Senior Citizen/Freedom Fighter ID Card issued by Government
    • Cards issued by Universities/deemed universities or institutes under statutes like ICAI, ICWA, ICSI.
    • Permanent Retirement Account No. (PRAN) card issued to New Pension System (NPS) subscribers by CRA (NSDL).
    • Any other photo ID card issued by Central Government/State Governments/Municipal authorities/Government organizations like ESIC/EPFO.
    • A Micro SIP application will be rejected where it is found that the Registration of the application will result in the aggregate of Micro SIP installments in a financial year exceeding Rs. 50,000 or where there are deficiencies in supporting documents.
    • Rejected applications will be sent back to the investor with a deficiency memo.
    • In case the first Micro SIP installment is processed (as the cheque may be banked), and the application is found to be defective, the Micro SIP registration will be ceased for future installments. No refunds will be made for the units already allotted. Investor will be sent a communication to this effect. However, redemptions shall be allowed.
Good Practices for Financial Advisers

Meaning of a Good Practice:

  • A good practice is a positive action that must:
    • be successful
    • be innovative
    • have a possible multiplying effect
    • be sustainable
  • An action is a mechanism or a methodology.
  • Innovation means providing new or different solutions to existing ones to meet the needs of a person/activity.

Need for Good Practices by IFA

  • IFAs must follow Good Practices in financial advising to :-
    • Clearly define the scope of engagement with the client to avoid any dispute or difference on duties and remuneration
    • Better understand the client's needs and priorities to discharge duties in a professional manner
    • Build up a long-term relationship with the client, which could lead to sustained business from them
    • Develop a trust in IFA's abilities that could lead to more referrals by the client
    • Gain experience in methodologies that will lead to better organization of IFA's business structure

Good Practice areas in Financial Advising:

Defining Scope of Engagement

  • Scope of Engagement has to be mutually defined between IFA and the client before providing any financial planning service.
  • Mutual definition of 'Engagement' can be accomplished by:-
    • Identifying services to be provided
    • Disclosing IFA's compensation arrangements
    • Determining responsibilities of both the parties
    • Establishing duration of engagement
    • Providing information to define or limit scope of engagement

Gathering Client Data

  • Mutually define the client's personal and financial goals, needs and priorities before rendering any advice.
  • Explore the client's values, attitudes, expectations and time horizons as they affect the client's goals.
  • Mutually defining goals is essential to determine activities necessary for client engagement.
  • Goals and objectives must be in line with the client's values and attitudes.

Obtaining Quantitative Information

  • Obtain sufficient and relevant quantitative information and documentation prior to advising.
  • Information and documentation should be in tune with the scope of engagement and services to be provided.
  • It should relate to the client's financial resources, obligations and personal situation.
  • Communicate to the client that incomplete/inaccurate information will impact conclusions and recommendations.
  • In case of insufficient/non-availability of relevant information, restrict the scope or engagement to available information.

Analysing and Evaluating Client Information

  • Assess client's financial situation to determine the likelihood or reaching the stated objectives.
  • Both personal and economic assumptions should be considered in assessment.
  • Personal assumptions should include:
    • Retirement age
    • Life expectancy
    • Income needs
    • Risk factors
    • Time horizon

Identifying and Evaluating Financial Planning Alternatives

  • Consider sufficient and relevant alternatives to the client's current course of action.
  • Identify and evaluate alternatives required to reasonably achieve the client's goals and priorities.
  • Evaluation to factor in
    • Meaningful assumptions
    • Research on various financial products
    • Consulting with other professionals where required
    • Client's legal and regulatory limitations

Developing Financial Planning Recommendations

  • Recommendations should be based on an evaluation of alternatives and client's current course of action.
  • Recommendations to be consistent with:-
    • Mutually defined scope of engagement
    • Mutually defined client's goals, needs and priorities
    • Quantitative data provided by the client
    • Personal and economic assumptionss
    • IFA's analysis of client's current situation
    • Alternatives selected by the IFA
  • Recommendation may also be to continue the the current course of action.
  • Changes recommended should be specific or detailed or provide a general direction.

Presenting Recommendations

  • Assist the client in understanding:
    • Client's current situation
    • The commendation itself
    • Its impact on the ability to achieve goals
  • Indicate that changes in personal and economic conditions could alter intended outcome.
  • Changes may relate to legislative, family status, career, investment performance and health.
  • Ascertain client's willingness to act on the recommendations and if required, make modifications accordingly.

Agreeing on Implementation Responsibilities

  • Agreement on implementation responsibilities should be in tune with the scope of engagement.
  • The Client should be made responsible for retaining and delegating implementation responsibilities.
  • IFA's responsibilities to include:-
    • Identifying activities necessary for implementation
    • Division of activities between IFA and the client
    • Referring to other professionals
    • Sharing information
    • Selecting and securing products and services
  • Basis of referral to other professionals should also be disclosed to the client.

Selecting Products and Services

  • Use professional judgment in selecting products and services in the client's interest.
  • Professional Judgment should incorporate both quantitative and qualitative information about various products and alternatives.
  • Select appropriate products and services that are consistent with client's goals, needs and priorities.
  • Reasonably investigate and evaluate products and services that address the client's needs.

Monitoring the Responsibilities

  • Define and communicate monitoring activities that will be provided.
  • Communication should cover the extent, frequency and duration of monitoring activities to be provided by IFA.
  • Monitoring responsibilities will include:
    • Identifying changes in conditions that would impact existing recommendations
    • Obtaining information from the client to determine changes in personal circumstances
    • Reviewing work done by other professionals
    • Reviewing the client's progress towards financial goals
Reading a Mutual Fund Fact Sheet

Meaning of Fact sheet

  • Asset Management Companies usually publish monthly reports called "Fact Sheet" on various schemes.
  • Fact Sheets are normally published on websites of the Fund Houses.
  • Fact Sheets serve as an investor's guide.
  • The objective is to help investors (both existing and potential) to review the performance and other features of the schemes to take and informed investment decision.

Fact Sheet Contents

  • An analytical review from the CMO outlining:
    • Current state of the economy
    • Capital Markets' behaviour and general performance
    • New initiatives taken to serve Investors
    • New product launches
    • Recommendations to investors on suitable products for different type of investors
    • Social responsibility initiatives taken, like the "Go Green" campaign etc also form part of the Monthly Reports published by fund houses.

Fact Sheets Contain Critical Information On The Scheme Relating To:

  • Investment objective and date of inception of the fund
  • Portfolio of the scheme
  • Fund Manager-name and background
  • Investment style matrix
  • Fund performance v/s Benchmark performance
  • Plans and options
  • Fund positioning

Types of Fact Sheets

  1. Equity-Oriented Funds' Fact Sheets
  2. Debt-Oriented Funds' Fact Sheets
  3. Balanced Fund's Fact Sheets

Equity-Oriented Fund's Fact Sheets

1. Stock Allocation

  • Consider the top 10 stocks in the portfolio to determine the level of diversification.
  • In a diversified equity fund, normally, the top 10 stocks should not be more than 40% of net assets.
  • A fund could be well-diversified across the 10 stocks but significant exposure to a single stock could dilute the diversification.
  • Look at the fund's portfolio over several months to get a sense of the consistency in the stock picks.
  • Too much churn in the stock picks (new names every other month) indicates punting rather than investing.
  • Too much of churn also adds to the trading cost which eats into the returns.

2. Sectoral Allocation

  • A fund could be well-diversified across stocks but may not be diversified well enough across sectors.
  • Steep declines of stocks' prices in the sectors in which the fund has significant positions could deeply hurt the fund performance.
  • While calculating the sectoral allocation, combine like-natured sectors to understand the level of sectoral diversification for instance, most equity funds list 'Auto' and 'Ancillaries' sectors distinctly.
  • Similar-natured sector's allocation must be combined.
  • There is also a problem of categorization of companies across sectors.
  • There is no standardisation across fund houses.
  • Different equity funds categorise the same company across different sectors.

3. Asset Allocation

  • An Asset Allocation' table tells you how the fund's net assets are diversified across stocks, current assets/cash.
  • An equity fund's allocation to cash should be noted.
  • Cash levels indicate fund manager's comfort with market levels at that point of time.
  • This can be established by browsing through the previous month's fact sheets.
  • Fund manager being in cash for some time indicates that he does not find enough stock-picking opportunities at existing levels.
  • Being in cash could work in the fund manager's favour if the market crashes.
  • Higher cash allocation works against the fund during a rising market.
  • Being fully invested in a rising market normally gives better fund returns.

4. Portfolio Turnover Ratio

  • Ratio tells the investor how much churn the portfolio has witnessed.
  • It is calculated based on the number of shares bought and sold by the equity fund over the review period.
  • A high Turnover Ratio (vis-a vis peers or other equity funds from the same fund house) indicates that the portfolio has seen an above-average churn.
  • A high churn by itself does not necessarily imply that the fund is good or bad.
  • However it must be in line with the fund's investment philosophy.
  • A Growth Fund may have a high turnover ratio though it adds to trading costs.
  • A value Fund typically has a lower churn as the stocks are invested over long-term.
  • Fund houses either don't reveal the Portfolio Turnover Ratios or when they do reveal them, it is not standardized.
  • In the absence of standardization an opportunity to compare them across fund houses is rendered difficult.

5. Expense Ratio

  • This ratio underscores expensiveness of the equity fund.
  • A high Expense Ratio indicates that the investor's investment is expensive.
  • 'Fund Management' expenses form the largest chunk of the expense ratio.
  • As per regulations, 'Fund Management' expenses must decline with a rise in net assets.
  • Larger equity funds have more scope to reduce their Expense Ratios.
  • Ratios are declared by fund houses once in six months.

6. Fund Manager Information

  • It always helps to know who is managing your fund.
  • Investors should not get infatuated by any fund manager in particular and look for investment teams instead.
  • Over the long-term, it pays to have your money managed by a group of fund managers, rather than one star fund manager.
  • A star fund manager may quit the fund house at any given time and take the performance with him.
  • Keep an eye on the fund manager's details.
  • Typically, there should not be many external changes in the fund management team.
  • Same names managing money over a period of time indicates stability in the fund management team and process.
  • Fund houses normally provide the fund manager's details.

Debt-Oriented Fund's Fact Sheets

1. Average Maturity

  • This is the most significant aspect to look out for in a debt fund fact sheet.
  • Average Maturity of a portfolio for a particular month in isolation does not tell the investor much.
  • The investor must go back several months to see how the Average Maturity of the portfolio has moved.
  • Reviewing over time helps to understand the fund manager's view on debt markets.
  • Maintaining a higher Average Maturity for some time indicates expectation of interest rated to fall over time.
  • On the other hand, lower Average Maturity of the portfolio means that the fund manager is cautious about interest rates.
  • Ideally, investors must read up on peer fact sheets to understand the consensus on interest rates.

2. Credit Rating Profile

  • Debt funds invest in securities with varying credit ratings.
  • Most debt funds do not take on undue credit risk i.e. they invest primarily in securities that are highly rated.
  • Investors should make the credit rating profile of the debt fund.
  • A large chunk in AAA/Sovereign paper (which is the highest rating) implies that the fund us taking lower credit risk.
  • On the other hand, a higher allocation to AA + /AA paper underlines that the fund manager is taking credit risk.

3. Asset Allocation

  • Like with equity funds, debt fund investors must consider the asset allocation of the fund under review.
  • It helps in understanding the investment approach of the fund manager and the risk he is taking.
  • Debt funds invest mainly in corporate bonds and Government securities carrying varying risk.
  • The percent level of assets invested in both these segments required to understand the portfolio risk.
  • Floating rate funds invest predominantly in floating rate paper.
  • Invest predominantly in cash/current assets when there is a lack of adequate floating rate instruments.
  • Likewise, monthly income plans invest a portion of assets in equities with a cap.
  • Investors must check the equity allocation over the last several months to understand:-
    • the equity risk the fund manager is taking
    • adherence to the ceiling on equity investments

Balanced Fund's Fact Sheets

1. Common Factors

  • Balanced fund is hybrid instrument that holds both equity and debt.
  • Factors like 'performance', 'top stock picks' and 'sectoral allocation' which apply to equity-oriented fact sheets are equally relevant.
  • Regarding the equity component, investment objective deserves special mention.

2. Investment Objective

  • A balanced fund's investment objective can reveal its risk profile.
  • A fund investing up to 75% of its corpus in equities could be termed riskier than one which invests 60% in equities.
  • The fund's adherence to its mandate should be studied closely.
  • It is common to see balanced funds exceeding their stated equity mandate during a bull run with a view to clock superior returns.
  • Studying the equity component during a bull run and a bear phase alike, will disclose the fund's true nature.

3. Maturity Profile

  • The maturity profile of debt instruments offers and opportunity to peek into the fund manager's stance.
  • In an uncertain interest rate scenario, a cautious balanced fund would typically:-
    • hold instruments with a shorter tenure like treasury bills etc.
    • or a higher cash component.
  • Investment in longer-tenured instruments should be read as an attempt to clock higher growth by taking interest rate risks.
Investor's Behavior


  • It is the study of how psychology affects investors decision-making regarding their investments.
  • Psychology is the genesis of human desires, goals and motivations.
  • It is also the basis for a wide variety of human errors that stem from:
    • Perpetual illusions
    • Overconfidence
    • Over-reliance or rules of thumb, and emotions

Basis of Investor's Behaviour:

  • Individuals make their most effective decisions
    • When acting on complete information
    • When implications for their actions are known to them.
  • But in complex markets, conditions are uncertain because:
    • there are numerous potential outcomes (returns)
    • probabilities (risks) associated with the various outcomes are also often difficult to measure
  • Actions of others may also make it difficult to make objective decisions.

Influences on Investors Behaviour;

  • Expected returns of an Investor
  • Risk preferences of an investor
  • Personal confidence of the investor

Factors Influencing Expected Returns;

  • Investors are motivated to choose an investment with the highest expected returns.
  • "Greed" is seen as quite rational.
  • Change in the relative expected returns triggers a substitution effect.
  • For example, changing interest rated affects the bonds 'returns directly and through a substitution effect, the returns to equities are also affected.
  • Generally, equity markets will rise as interest rates fall (and the returns on bonds fall or visa versa.

Risk Preferences of an Investor

  • Risk preference is influenced by :
    • Individual's acceptance of a particular investment
    • How much they are willing to pay for that investment
    • Risk seekers receive great utility from an increase in wealth.
  • Investor's choose an investment with expected returns that are less than initial outlay-hoping that the investment will actually exceed expectations in future.
  • Investors distress by prospective losses > their happiness attained by equivalent gains, regardless of their level of wealth.
  • Studies suggest that investors have an inherent bias toward risk aversion.
  • Investors may also become:
    • Overly optimistic regarding future prospects following a successful investment experience or
    • Conversely, if they have lost money, they may become more myopic in their aversion to future potential losses.

Factors Relating to Personal Confidence

  • Some investors:-
    • Feel confident in their own skills and judgement in investing
    • Distinguish themselves from others or the market (i.e., beating the market).
  • Other investors:
    • Lack the confidence and
    • Either follow the group or rationalize some course of action that would still generate group approval.
  • Herd behaviour has frequently been highlighted in financial markets.
  • Investors may trade on noise (caused by the actions of others) as if it were information.
  • Pride has often been highlighted as an explanation of investor's behaviour.
  • Some people are highly confident in their intuitive judgment which leaves them susceptible to illusions and poor judgment.
  • Investors often think that their choices are based on superior information (or superior information processing methods)without even knowing what information is available to the counter-party to their trade
  • Possible fear of regret is a factor driving some investor's behaviour.
  • Some feel deeply hurt when their decision has gone wrong.
  • Others choose a popular security against an unpopular security because it would be easier to explain losses if everyone else bought the same security.
  • Investors may use investment advisers as scapegoats reducing their responsibility for poor investment decisions.

Common Behavioural Mistakes Investors Make:

Money Mistake 1-Living in the Past.

  • Despite all warnings, investors insist on taking past performance as an indicator of future results.
  • This leads them to buy at or near highs, and sell at or near lows.

Money Mistake 2-Trend Spotting

  • Human brains are tremendous trend-spotters – it only takes two or three repetitions to pick up on a simple pattern.
  • After hearing about three years of astonishing performance, for example, we feel confident predicting future good performance.
  • But our brains require about six repetitions to see a repeating, cyclical pattern, so we're more likely to explain away a drop than to see it as a part of a cyclical pattern.

Money Mistake 3: Safety in Numbers what Client's Feel

Decision outcome Alone With Herd
Wrong Very Bad Not so Bad
Right Very Good Not so Good

Some Tips To Advisers On Behavioural Decision-Making By Investors:

  • Advise the investors to:
    • Have realistic expectations about their expected returns which are uncertain
    • Read the Scheme Information Document properly before investing to see the suitability of their investment
    • Be comfortable with, and behave in a reasonable manner in accepting, the risks of an investment.
    • Not to follow the herd in taking financial decisions
    • Turn off from excessive brokers tips, too much exposure to business channel news, etc. which is more likely to confuse than to help
    • Create a written Investment Policy Statement to document their needs and strategies and document their buy/sell decisions to align them with the statement

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

DESIGNED BY : Indigo Consulting
DEVELOPED BY :   Prosares Solution Pvt Ltd