The document discusses the history and structure of mutual funds. It notes that the first mutual fund was created in the Netherlands in 1774. It then describes the key participants in a mutual fund like the board of directors, sponsor, custodian, investment advisor, transfer agent, and dealers. The document also outlines advantages like diversification and professional management, as well as disadvantages such as costs and taxes. Finally, it briefly discusses the different types of mutual funds and regulations around mutual funds.
Hedge Fund Due Diligence: Resources to Help Investors Better Understand Their...HedgeFundFundamentals
In light of recent changes brought forth by the new rules adopted by the Securities and Exchange Commission (SEC) implementing the Jumpstart our Business Startups (JOBS) Act, this presentation is designed as an educational tool with basic information about who can invest in hedge funds as well as some potential red flags regarding investment fraud.
Hedge Fund Due Diligence: Resources to Help Investors Better Understand Their...HedgeFundFundamentals
In light of recent changes brought forth by the new rules adopted by the Securities and Exchange Commission (SEC) implementing the Jumpstart our Business Startups (JOBS) Act, this presentation is designed as an educational tool with basic information about who can invest in hedge funds as well as some potential red flags regarding investment fraud.
This helpful presentation takes an in depth look into the many issues surrounding this important topic in the hedge fund industry, clearing up misconceptions and offering a thorough explanation of the reasons behind offshore investing.
Included in this presentation among other topics, users will find information regarding:
How hedge funds are structured
The composition of hedge fund investors
Reasons why investors choose offshore hedge funds
The various domiciles in which hedge funds operate
How hedge funds accommodate the needs of various investors
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
This educational resource details the traditional calculation method that hedge funds use for their assets under management. It also explains the new method of calculation used by the Securities and Exchange Commission, called Regulatory Assets Under Management (RAUM).
MFA's new educational presentation explains the fees associated with hedge funds and how they are used by hedge fund managers. Generally, hedge fund structures incur management fees and performance fees. Other terms explored in the presentation include high-water marks and hurdle rates. Of course, all hedge fund fees charged to any particular investor are based on contractual terms agreed to by the fund manager and the investor. While there is no such thing as a “standard” fee, there are a number of general terms that apply to hedge fund fees.
Hedge funds offer qualified investors a unique partnership. While hedge funds first began as a way to offer investors a balanced – or market-neutral – approach to investing, the methods have evolved through the years. This presentation focuses on one of those strategies, relative value.
This presentation offers users a simple guide to learning the basic structure of hedge funds. Guiding users through hedge fund structures, covering topics such as:
• Hedge funds’ typical partnership structure
• Organizational structure at many hedge funds
• Due to their structure, only certain types of investors can invest with hedge funds
• The role of portfolio managers
• The typical role of general counsels, auditors, and administrators at hedge funds
• How prime brokers interact with hedge funds
• Executing brokers and their role in the hedge fund industry
• Fee structure at hedge funds
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
Hedge funds originated as a vehicle to help diversify investment portfolios, manage risk and produce reliable returns over time. While hedge funds’ investor base has evolved over the years – from individuals to institutions such as pensions, universities and foundations – their core goals have not.
This presentation provides a brief overview of the investment approach hedge funds offer their partners.
It also illustrates the many ways hedge fund investments benefit communities and individuals.
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
Short Selling: An Important Tool for Price Discovery and Liquidity in the Fin...HedgeFundFundamentals
The new presentation gives users valuable information about how hedge funds and other investors participate in the marketplace through short selling.
As the presentation describes, short selling generally means borrowing an asset (a security/stock, commodity futures contract, and corporate or sovereign bond) from a broker and selling it, with the understanding that it must later be bought back (hopefully at a lower price) and returned to the broker. The short seller then closes out the short position by buying equivalent securities on the open market, or by using an identical security it already owned, and returning the borrowed security to the lender.
As many news stories highlight short selling as a negative force in our markets, the new presentation explains how short selling can be a way for investors to communicate their view on the price of an asset. Short selling also provides many other critical benefits to investors, including:
• Risk management for hedging long positions and managing portfolio risk
• Increasing efficiency in the marketplace because the transactions inform the market with their evaluation of future stock, bond, or commodity price performance
• Lowering overpriced securities by encouraging better price discovery
• Providing liquidity by increasing the number of potential sellers in the market
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
This helpful presentation takes an in depth look into the many issues surrounding this important topic in the hedge fund industry, clearing up misconceptions and offering a thorough explanation of the reasons behind offshore investing.
Included in this presentation among other topics, users will find information regarding:
How hedge funds are structured
The composition of hedge fund investors
Reasons why investors choose offshore hedge funds
The various domiciles in which hedge funds operate
How hedge funds accommodate the needs of various investors
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
This educational resource details the traditional calculation method that hedge funds use for their assets under management. It also explains the new method of calculation used by the Securities and Exchange Commission, called Regulatory Assets Under Management (RAUM).
MFA's new educational presentation explains the fees associated with hedge funds and how they are used by hedge fund managers. Generally, hedge fund structures incur management fees and performance fees. Other terms explored in the presentation include high-water marks and hurdle rates. Of course, all hedge fund fees charged to any particular investor are based on contractual terms agreed to by the fund manager and the investor. While there is no such thing as a “standard” fee, there are a number of general terms that apply to hedge fund fees.
Hedge funds offer qualified investors a unique partnership. While hedge funds first began as a way to offer investors a balanced – or market-neutral – approach to investing, the methods have evolved through the years. This presentation focuses on one of those strategies, relative value.
This presentation offers users a simple guide to learning the basic structure of hedge funds. Guiding users through hedge fund structures, covering topics such as:
• Hedge funds’ typical partnership structure
• Organizational structure at many hedge funds
• Due to their structure, only certain types of investors can invest with hedge funds
• The role of portfolio managers
• The typical role of general counsels, auditors, and administrators at hedge funds
• How prime brokers interact with hedge funds
• Executing brokers and their role in the hedge fund industry
• Fee structure at hedge funds
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
Hedge funds originated as a vehicle to help diversify investment portfolios, manage risk and produce reliable returns over time. While hedge funds’ investor base has evolved over the years – from individuals to institutions such as pensions, universities and foundations – their core goals have not.
This presentation provides a brief overview of the investment approach hedge funds offer their partners.
It also illustrates the many ways hedge fund investments benefit communities and individuals.
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
Short Selling: An Important Tool for Price Discovery and Liquidity in the Fin...HedgeFundFundamentals
The new presentation gives users valuable information about how hedge funds and other investors participate in the marketplace through short selling.
As the presentation describes, short selling generally means borrowing an asset (a security/stock, commodity futures contract, and corporate or sovereign bond) from a broker and selling it, with the understanding that it must later be bought back (hopefully at a lower price) and returned to the broker. The short seller then closes out the short position by buying equivalent securities on the open market, or by using an identical security it already owned, and returning the borrowed security to the lender.
As many news stories highlight short selling as a negative force in our markets, the new presentation explains how short selling can be a way for investors to communicate their view on the price of an asset. Short selling also provides many other critical benefits to investors, including:
• Risk management for hedging long positions and managing portfolio risk
• Increasing efficiency in the marketplace because the transactions inform the market with their evaluation of future stock, bond, or commodity price performance
• Lowering overpriced securities by encouraging better price discovery
• Providing liquidity by increasing the number of potential sellers in the market
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
2. Presented To:
Sir Ameen
Presented By:
M Zishan Hyder 55272
Fuzail Kaleem
3. The first mutual fund was established in
Europe.
A Dutch merchant Adriaan van Ketwich
created the first mutual fund in 1774.
“Eendragt Maakt Magt”, which meant “Unity
Creates Strength”.
First mutual fund outside the Netherlands was
the Foreign & Colonial Government Trust,
which was established in London in 1868.
4. Mutual funds were introduced into the United
States in the 1890s. They became popular
during the 1920s..
In year 1924, the first open-end fund
“Massachusetts Investors’ Trust of Boston” was
the formed.
ICP offered a series of closed end funds in 1966,
these were later privatized in 2000.
5. Board of Directors
A management investment company (mutual
fund company) has a CEO, a team of officers
and a board of directors.
Sponsor
The principal underwriter of a mutual fund is
called a distributor, or more commonly,
the sponsor.
6. Custodian
The custodian is responsible for the possession
of the securities purchased by the investment
company for its portfolio.
Investment Advisor
The board of directors hires an investment
advisor to invest the cash and securities held in
the fund's portfolio, implement the objectives
outlined by the board.
7. Transfer Agent
The mutual fund contracts with a transfer
agent to issue, redeem and cancel fund shares,
handle the distribution of dividend and capital
gains to shareholders, and send out trade
confirmations
Dealers
As mentioned before, the sponsor usually
distributes shares of the mutual fund through
dealers.
8. Selling securities short
Buying securities on margin
Participating in joint investment or trading
accounts
Distributing its own securities, except through
a sponsor
9. An affiliated person is someone who controls
an investment company's operations in any
way.
An interested person includes those
individuals who have a relationship with an
affiliated person that the SEC deems influential
in matters of fund operation. These people
would include immediate family members of
affiliated parties, legal counselors, broker-dealers,
and so on.
10. Diversification . Securities from hundreds or
even thousands of issuers it reduces the risk of
loss.
Professional Management . Expertise to
manage and reinvest interest or dividend
income, or to investigate thousands of
securities. Access to extensive research, market
information, and skilled securities traders.
11. Liquidity . Mutual fund can be bought and
sold on any business day, so investors have
easy access to their money. Many individual
securities can also be bought and sold readily,
others aren't widely traded. (CE & IC)
Convenience . Mutual funds offer services
that make investing easier. Mail, telephone, or
the Internet. Automatic investments into a fund
or automatic transfers from a fund to your
bank account.
12. Tax Free Return The stock dividend from
mutual funds are exempt from tax. Cash
dividend taxable
No Guarantees. Unlike bank deposits,
principal and returns are not guaranteed.
Diversification “Penalty." Diversification
reduces the risk of loss, it also limits the
potential for making a killing in the market.
13. Open End – continuously offer and redeem
their units to the investors.
Closed End – one time issuance of certificates
and then are traded in the secondary market.
Investment Company – one time issuance of
shares and then are traded in the secondary
market.
14. Open end and closed end funds are established through
a trust deed as a trust under the trust act 1888.
Investment Company is established as a limited
liability company.
Operated by two parties i.e. fund manager and the
trustee or custodian.
CDC - largest trustee of mutual funds in Pakistan
with almost 90% of the market share.
SECP through NBFC Regulations 2008 regulates the
mutual fund industry.
15. Fund Manager
Manage the assets of the mutual fund.
Maintenance of financial and other records and documents.
Maintenance of the record of unit or certificate holders.
Receipt and processing of investment and redemption
applications.
Trustee
Hold all the property mutual fund for the unit or certificate
holder.
Settlement of transaction entered into by the fund manager.
Ensure the methodology and procedures adopted by the fund
manager in calculating the value of units are adequate.
16. Equity Fund
Balanced Fund
Asset Allocation Fund
Fund of Funds
Capital Protected / Guaranteed Fund
17. Index Fund
Money Market Fund
Income Fund
Aggressive Fixed Income Fund
Islamic Funds
18. Income Tax Ordinance, 2001
Income of mutual fund is exempt subject to
distribution of ninety percent of accounting
income reduced by capital gains realized or
unrealized.
Mutual funds are also exempt from
withholding tax and capital gains tax.
19. Investor will be taxed on cash dividend @ 10%
stock dividend exempt.
Investors have to pay capital gains tax if units,
certificates or shares are redeemed/sold before
one year.
Investors also get rebate on income tax on their
investment in mutual funds.
20. A mutual fund brings together a group of
people and invests their money in stocks,
bonds, and other securities.
The advantages of mutuals are professional
management, diversification, economies of
scale, simplicity and liquidity.
The disadvantages of mutuals are high costs,
over-diversification, possible tax consequences,
and the inability of management to guarantee a
superior return.
21. There are many, many types of mutual funds. You
can classify funds based on asset class, investing
strategy, region, etc.
Mutual funds have lots of costs.
Costs can be broken down into ongoing fees
(represented by the expense ratio) and transaction
fees (loads).
The biggest problems with mutual funds are their
costs and fees.
Mutual funds are easy to buy and sell. You can
either buy them directly from the fund company or
through a third party.