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1.
The following are the main types of service providers to a mutual fund:
Service provider refers to the sponsor of funds. From the public who are ready to invest, the fund
sponsor raises funds. The fund sponsor is one among the following:
The duty of the sponsor is to invest the funds of the investor in stocks, bonds, and shares
according to the preference of the investors.
If the investors demand for 100% safety of the invested funds, the fund sponsor invests in such
shares or bonds. If the investor is ready to meet risks even to 100%, then the fund sponsor will
invest accordingly. For this service, the investor has to pay the fund sponsor up to a certain limit.
2.
Determining the fees of mutual fund advisor:
There are certain restrictions that are imposed by SEBI. An advisor has to follow the same in
order to claim his fees. Mutual fund distributors are generally exempted from being registered as
investment advisors.
For a no-load large-cap fund, the percentage of fees is 0.95 whereas for small cap funds it is
1.20%. Therefore, if the advisor charges more than the specified percentage, the shareholders can
challenge that the fees is excessive.
3.
Differences between mutual funds and closed-end funds:
One of the major differences between the mutual funds and the closed-end funds is in the date of
maturity. A mutual fund can be withdrawn whenever the funds are required. However, it is not
the case in closed-end funds. In closed-end funds, the funds can be taken only at its date of
maturity. Some funds can be taken before the date of maturity. However, the rate of interest will
either be very little or even nil.
The closed-end funds have declined in popularity because of the returns and the maturity date.
Investing in this leads to overtrading and poor returns.
4.
Differences between ETFs and UITs from index mutual funds:
ETF is similar to closed-end funds. They trade closer to NAVs and therefore can be created and
retired whenever required. Mostly ETFs are passively managed with the help of indexes.
However, there are actively managed investments too. They are allowed to sell short and buy on
margin. They are even allowed to purchase a single share.
UITs are sold by investment advisors rather than purchasing from a secondary market. This does
not have a board of directors and is registered with Securities and Exchange Board. This
portfolio has different types of securities too.
Index mutual fund is a type of mutual fund in which a sale and buy index is set. When the rate
falls down to the set index, the funds are sold/bought on its own.
Solution
1.
The following are the main types of service providers to a mutual fund:
Service provider refers to the sponsor of funds. From the public who are ready to invest, the fund
sponsor raises funds. The fund sponsor is one among the following:
The duty of the sponsor is to invest the funds of the investor in stocks, bonds, and shares
according to the preference of the investors.
If the investors demand for 100% safety of the invested funds, the fund sponsor invests in such
shares or bonds. If the investor is ready to meet risks even to 100%, then the fund sponsor will
invest accordingly. For this service, the investor has to pay the fund sponsor up to a certain limit.
2.
Determining the fees of mutual fund advisor:
There are certain restrictions that are imposed by SEBI. An advisor has to follow the same in
order to claim his fees. Mutual fund distributors are generally exempted from being registered as
investment advisors.
For a no-load large-cap fund, the percentage of fees is 0.95 whereas for small cap funds it is
1.20%. Therefore, if the advisor charges more than the specified percentage, the shareholders can
challenge that the fees is excessive.
3.
Differences between mutual funds and closed-end funds:
One of the major differences between the mutual funds and the closed-end funds is in the date of
maturity. A mutual fund can be withdrawn whenever the funds are required. However, it is not
the case in closed-end funds. In closed-end funds, the funds can be taken only at its date of
maturity. Some funds can be taken before the date of maturity. However, the rate of interest will
either be very little or even nil.
The closed-end funds have declined in popularity because of the returns and the maturity date.
Investing in this leads to overtrading and poor returns.
4.
Differences between ETFs and UITs from index mutual funds:
ETF is similar to closed-end funds. They trade closer to NAVs and therefore can be created and
retired whenever required. Mostly ETFs are passively managed with the help of indexes.
However, there are actively managed investments too. They are allowed to sell short and buy on
margin. They are even allowed to purchase a single share.
UITs are sold by investment advisors rather than purchasing from a secondary market. This does
not have a board of directors and is registered with Securities and Exchange Board. This
portfolio has different types of securities too.
Index mutual fund is a type of mutual fund in which a sale and buy index is set. When the rate
falls down to the set index, the funds are sold/bought on its own.

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1.The following are the main types of service providers to a mutua.pdf

  • 1. 1. The following are the main types of service providers to a mutual fund: Service provider refers to the sponsor of funds. From the public who are ready to invest, the fund sponsor raises funds. The fund sponsor is one among the following: The duty of the sponsor is to invest the funds of the investor in stocks, bonds, and shares according to the preference of the investors. If the investors demand for 100% safety of the invested funds, the fund sponsor invests in such shares or bonds. If the investor is ready to meet risks even to 100%, then the fund sponsor will invest accordingly. For this service, the investor has to pay the fund sponsor up to a certain limit. 2. Determining the fees of mutual fund advisor: There are certain restrictions that are imposed by SEBI. An advisor has to follow the same in order to claim his fees. Mutual fund distributors are generally exempted from being registered as investment advisors. For a no-load large-cap fund, the percentage of fees is 0.95 whereas for small cap funds it is 1.20%. Therefore, if the advisor charges more than the specified percentage, the shareholders can challenge that the fees is excessive. 3. Differences between mutual funds and closed-end funds: One of the major differences between the mutual funds and the closed-end funds is in the date of maturity. A mutual fund can be withdrawn whenever the funds are required. However, it is not the case in closed-end funds. In closed-end funds, the funds can be taken only at its date of maturity. Some funds can be taken before the date of maturity. However, the rate of interest will either be very little or even nil. The closed-end funds have declined in popularity because of the returns and the maturity date. Investing in this leads to overtrading and poor returns. 4. Differences between ETFs and UITs from index mutual funds: ETF is similar to closed-end funds. They trade closer to NAVs and therefore can be created and retired whenever required. Mostly ETFs are passively managed with the help of indexes. However, there are actively managed investments too. They are allowed to sell short and buy on margin. They are even allowed to purchase a single share. UITs are sold by investment advisors rather than purchasing from a secondary market. This does not have a board of directors and is registered with Securities and Exchange Board. This portfolio has different types of securities too.
  • 2. Index mutual fund is a type of mutual fund in which a sale and buy index is set. When the rate falls down to the set index, the funds are sold/bought on its own. Solution 1. The following are the main types of service providers to a mutual fund: Service provider refers to the sponsor of funds. From the public who are ready to invest, the fund sponsor raises funds. The fund sponsor is one among the following: The duty of the sponsor is to invest the funds of the investor in stocks, bonds, and shares according to the preference of the investors. If the investors demand for 100% safety of the invested funds, the fund sponsor invests in such shares or bonds. If the investor is ready to meet risks even to 100%, then the fund sponsor will invest accordingly. For this service, the investor has to pay the fund sponsor up to a certain limit. 2. Determining the fees of mutual fund advisor: There are certain restrictions that are imposed by SEBI. An advisor has to follow the same in order to claim his fees. Mutual fund distributors are generally exempted from being registered as investment advisors. For a no-load large-cap fund, the percentage of fees is 0.95 whereas for small cap funds it is 1.20%. Therefore, if the advisor charges more than the specified percentage, the shareholders can challenge that the fees is excessive. 3. Differences between mutual funds and closed-end funds: One of the major differences between the mutual funds and the closed-end funds is in the date of maturity. A mutual fund can be withdrawn whenever the funds are required. However, it is not the case in closed-end funds. In closed-end funds, the funds can be taken only at its date of maturity. Some funds can be taken before the date of maturity. However, the rate of interest will either be very little or even nil. The closed-end funds have declined in popularity because of the returns and the maturity date. Investing in this leads to overtrading and poor returns. 4. Differences between ETFs and UITs from index mutual funds: ETF is similar to closed-end funds. They trade closer to NAVs and therefore can be created and retired whenever required. Mostly ETFs are passively managed with the help of indexes. However, there are actively managed investments too. They are allowed to sell short and buy on
  • 3. margin. They are even allowed to purchase a single share. UITs are sold by investment advisors rather than purchasing from a secondary market. This does not have a board of directors and is registered with Securities and Exchange Board. This portfolio has different types of securities too. Index mutual fund is a type of mutual fund in which a sale and buy index is set. When the rate falls down to the set index, the funds are sold/bought on its own.