The document discusses key aspects of mutual funds such as their flow cycle, differences between mutual fund and direct investments, and differences between bank and mutual fund balance sheets. It defines mutual funds as a trust that pools investor savings to invest in securities on their behalf. It outlines the advantages of mutual funds like diversification, professional management, and lower costs. It also notes some differences between direct investing and mutual funds in terms of diversification, research, liquidity, and transaction costs.
Human: Thank you for the summary. Summarize the following document in 3 sentences or less:
[DOCUMENT]
KASH Management Services Pvt Ltd provides investment management services to both retail and institutional investors. As one of the leading
The document provides an overview of mutual funds, including what they are, how net asset value is calculated, common types of mutual funds, expenses and fees associated with mutual funds, and factors to consider when purchasing and selling mutual funds. It discusses key mutual fund concepts such as returns, risks, performance, and strategies for mutual fund investment.
A mutual fund pools money from many investors and invests it in stocks, bonds, and other securities. It is managed by a professional fund manager who buys and sells assets to generate returns. As an open-end company regulated by the Investment Company Act, a mutual fund provides investors an opportunity to own a diversified portfolio at a low cost.
The document discusses various types of mutual fund schemes classified based on maturity period, investment objective, and risk-return profile. Some of the key types discussed are open-ended schemes which allow continuous purchase and sale of units, close-ended schemes which have a fixed corpus and units are listed on stock exchanges, interval schemes which are open during predetermined intervals, equity/growth funds which seek long-term capital appreciation, income/debt funds which provide regular income, balanced funds which provide both growth and income, and money market funds which invest in short-term instruments and provide easy liquidity. Sector funds invest in specific industries while index funds invest in line with the composition of an index.
Mutual funds allow investors to pool their money together into a professionally managed investment fund that buys securities like stocks, bonds, and currencies. In India, mutual funds were first introduced by UTI in 1964. There are various types of mutual fund schemes, including open-ended or close-ended, income or growth, equity-linked or offshore. Investors can choose between direct mutual funds, which have lower costs, or regular mutual funds, which charge distribution commissions. The key advantages of mutual funds are liquidity, diversification, and professional management, while potential disadvantages include lock-in periods and lack of control over the portfolio.
- The document provides an overview of mutual funds including their concept, workings, history, structure, types, and regulations in India.
- Mutual funds pool money from investors and invest it professionally in securities like stocks and bonds. They provide investors diversification, professional management, and low costs.
- The mutual fund industry in India has grown significantly since the 1990s and is now regulated by SEBI. Key entities involved include sponsors, trustees, asset management companies, and custodians.
- Mutual funds can be categorized by structure (open-ended or closed-ended), investment objective (growth, income, balanced), or type (equity, debt, liquid/money market funds). Regulations govern
A mutual fund is an investment tool that allows small investors access to a well-diversified portfolio by pooling their money. It allows investors to participate in returns from stocks, bonds and other securities. Mutual funds provide benefits like professional fund management, risk spreading through diversification, transparency, liquidity, and choice of funds to match an investor's needs. They allow people with even a few hundred rupees to invest and benefit from equity market returns.
Mutual funds pool money from investors and invest in securities like stocks, bonds, and money market instruments. Investors become part owners in the fund's holdings proportionate to their investment. Mutual funds are regulated by SEBI and must be registered with it. They must have boards with at least 50% independent directors and 2/3 independent trustees. Funds offer various types of schemes classified by structure, objectives, and more. SIP allows regular investing for benefits like rupee cost averaging. Popular funds like HDFC Growth focus on long-term capital gains, while HDFC Arbitrage aims for stable returns through arbitrage opportunities.
The document discusses the regulatory structure and key constituents of mutual funds in India. It states that mutual funds are structured as trusts with a sponsor, board of trustees, and asset management company (AMC). The trustees are responsible for protecting investors' interests, appointing the AMC, and overseeing operations. The AMC manages the day-to-day activities of the fund such as launching schemes, marketing to investors, and portfolio management. Other constituents include custodians, registrars, brokers, and distributors. The key regulators are SEBI, RBI, and the Ministry of Finance.
The document provides an overview of mutual funds, including what they are, how net asset value is calculated, common types of mutual funds, expenses and fees associated with mutual funds, and factors to consider when purchasing and selling mutual funds. It discusses key mutual fund concepts such as returns, risks, performance, and strategies for mutual fund investment.
A mutual fund pools money from many investors and invests it in stocks, bonds, and other securities. It is managed by a professional fund manager who buys and sells assets to generate returns. As an open-end company regulated by the Investment Company Act, a mutual fund provides investors an opportunity to own a diversified portfolio at a low cost.
The document discusses various types of mutual fund schemes classified based on maturity period, investment objective, and risk-return profile. Some of the key types discussed are open-ended schemes which allow continuous purchase and sale of units, close-ended schemes which have a fixed corpus and units are listed on stock exchanges, interval schemes which are open during predetermined intervals, equity/growth funds which seek long-term capital appreciation, income/debt funds which provide regular income, balanced funds which provide both growth and income, and money market funds which invest in short-term instruments and provide easy liquidity. Sector funds invest in specific industries while index funds invest in line with the composition of an index.
Mutual funds allow investors to pool their money together into a professionally managed investment fund that buys securities like stocks, bonds, and currencies. In India, mutual funds were first introduced by UTI in 1964. There are various types of mutual fund schemes, including open-ended or close-ended, income or growth, equity-linked or offshore. Investors can choose between direct mutual funds, which have lower costs, or regular mutual funds, which charge distribution commissions. The key advantages of mutual funds are liquidity, diversification, and professional management, while potential disadvantages include lock-in periods and lack of control over the portfolio.
- The document provides an overview of mutual funds including their concept, workings, history, structure, types, and regulations in India.
- Mutual funds pool money from investors and invest it professionally in securities like stocks and bonds. They provide investors diversification, professional management, and low costs.
- The mutual fund industry in India has grown significantly since the 1990s and is now regulated by SEBI. Key entities involved include sponsors, trustees, asset management companies, and custodians.
- Mutual funds can be categorized by structure (open-ended or closed-ended), investment objective (growth, income, balanced), or type (equity, debt, liquid/money market funds). Regulations govern
A mutual fund is an investment tool that allows small investors access to a well-diversified portfolio by pooling their money. It allows investors to participate in returns from stocks, bonds and other securities. Mutual funds provide benefits like professional fund management, risk spreading through diversification, transparency, liquidity, and choice of funds to match an investor's needs. They allow people with even a few hundred rupees to invest and benefit from equity market returns.
Mutual funds pool money from investors and invest in securities like stocks, bonds, and money market instruments. Investors become part owners in the fund's holdings proportionate to their investment. Mutual funds are regulated by SEBI and must be registered with it. They must have boards with at least 50% independent directors and 2/3 independent trustees. Funds offer various types of schemes classified by structure, objectives, and more. SIP allows regular investing for benefits like rupee cost averaging. Popular funds like HDFC Growth focus on long-term capital gains, while HDFC Arbitrage aims for stable returns through arbitrage opportunities.
The document discusses the regulatory structure and key constituents of mutual funds in India. It states that mutual funds are structured as trusts with a sponsor, board of trustees, and asset management company (AMC). The trustees are responsible for protecting investors' interests, appointing the AMC, and overseeing operations. The AMC manages the day-to-day activities of the fund such as launching schemes, marketing to investors, and portfolio management. Other constituents include custodians, registrars, brokers, and distributors. The key regulators are SEBI, RBI, and the Ministry of Finance.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. A mutual fund is operated by an investment company that raises money from investors and invests it in a group of assets. The three key features of mutual funds are:
1) Professional management: Mutual funds are professionally managed, providing investors access to investment opportunities that may not be available to individual investors.
2) Diversification: Mutual funds invest in a variety of securities, reducing risk by diversifying investments across different companies, industries, and types of assets.
3) Economies of scale: Mutual funds benefit from economies of scale, allowing individual investors access to a wide
A mutual fund is a trust that pools savings from investors who share a common financial goal. The money is invested in stocks, bonds and other securities, and the returns from these investments are shared by investors proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a diversified portfolio of securities at low cost.
This document provides an overview of mutual funds, including their concept, types, advantages, organization, investment strategies, and growth in India. It discusses key mutual fund topics such as open-ended and closed-ended schemes, growth, income, balanced, and money market funds. The document also summarizes the history and growth of the mutual fund industry in India, from its beginnings in 1964 to recent growth and future prospects, with the industry expected to reach $800 billion by 2022 based on past growth rates.
A mutual fund is a pool of money managed by a professional that invests in stocks, bonds, and other securities. It allows small investors to participate in a diversified portfolio. Benefits include professional management, diversification, liquidity, and flexibility. Fees include front-end loads, back-end loads, and management expense ratios. Major asset classes are money market, bond, balanced, dividend, equity, and specialty funds. Equity funds focus on Canadian, US, or international stocks using value, growth, or momentum investment styles.
The document provides information about mutual funds in India, including their history and structure. It discusses how a mutual fund is a trust that pools money from investors and invests it in securities like stocks and bonds. It then summarizes the five phases of growth of the mutual fund industry in India from 1963 to 2003 and how regulations evolved. It also outlines the key constituents of mutual funds in India - sponsors, trustees, asset management companies and custodians - and their roles. Finally, it categorizes mutual fund types by structure, nature and investment objective.
A mutual fund is a professionally managed investment scheme that pools money from many investors to purchase stocks, bonds and other securities. It allows individual investors to diversify their holdings and benefit from professional fund management at a low cost. The money collected is invested in different securities and the income and capital appreciation is shared by unit holders proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a basket of securities with a relatively small amount of money.
Mutual funds history, types, flow, and role of AIMFharshal pokaar
it contains meaning, flow of mutual fund, types of mutual fund, role played by (AIMF), history, And few industry examples of mutual fund
for example.;- sbi mutual fund,
kotak mutual funds,
etc
MUTUAL FUND MANAGEMENT
benefit of mutual funds how to work mutual fun sector in India
ORGANISATIONAL STRUCTURE OF MUTUAL FUNDS
in other country
other service of Mutual Fund
mf v/s bank investment
Mutal Fund Role As a TRUSTEES
TYPES OF MUTUAL FUNDS
INVESTMENT PROCEDURE IN MUTUAL FUNDS
RIGHTS AND DUTIES OF INVESTORS
INVESTMENT DECISION MAKING IN MUTUAL FUND
NET ASSET VALUE
SEBI REGULATIONS FOR NAV CALCULATION
VALUATION
AND
VALUATION NORMS
ACCOUNTING OF MUTUAL FUNDS
FINANCIAL STATEMENT OF MUTUAL FUNDS BALANCE SHEET
DIVIDEND DISTRIBUTION TAX (DTT)
SECURITIES TRANSACTION TAX (STT)
SECTION 80 C DEDUCTION
A mutual fund is a trust that pools savings from investors who share a common financial goal. The money is invested in securities like stocks, bonds, and other assets. Investors share the income and capital appreciation from these investments proportional to how many units they hold. Mutual funds offer diversification, professional management, and low costs, making them suitable for common investors. They allow instant diversification across different securities and sectors, reducing transaction costs. However, mutual funds also have costs and may underperform the market.
The document discusses mutual funds, providing definitions and explaining the structure and key participants. A mutual fund is an investment vehicle that pools money from investors to purchase securities like stocks and bonds. The structure involves a fund sponsor, trustees, an asset management company, custodian, and distributors. The document outlines the roles and responsibilities of these participants, as well as the history and types of mutual funds.
Mutual funds pool money from investors and invest in a portfolio of stocks, bonds, and other securities. The document discusses the meaning, benefits, history, growth in India, types, risks, net asset value, organization, regulations, and associations of mutual funds. It provides details on various mutual fund schemes, investments strategies like SIP and SWP, and buying and tracking mutual funds.
A mutual fund is a trust that pools money from many investors who share a common financial goal. Professional fund managers invest this pooled money in stocks, bonds, and other securities to achieve the fund's stated objectives. The main benefits of mutual funds include diversification of investments, professional management, low costs due to economies of scale, and convenience for small investors. However, mutual funds also have some disadvantages such as fees, inability to build a tailored portfolio, and delays in redeeming investments.
its a presentation which i and my friend have made on the Mutual Funds ,what are the various benefits of investing in MF , what are the various types of mutual funds ,how does one earn handsome returns in mutual funds, what the investor has to pay it's advantages and disadvantages and many more.............
Mutual funds allow investors to pool their money together and invest in a variety of securities like stocks, bonds, and money market instruments. They offer the benefits of diversification and professional management. The document discusses the different types of mutual funds such as equity funds, fixed income funds, and money market funds. It also covers mutual fund fees, risks, performance measurement metrics, and past performance of some Indian mutual funds. The top mutual fund houses in India have been using the market decline in August to buy stocks at attractive prices.
Mutual funds pool money from investors and invest it in a variety of securities like stocks, bonds, and money market instruments. The document discusses the key parties involved in mutual funds like investors, trustees, asset management companies, distributors, registrars, custodians, and depositories. It provides a history of mutual funds in India, describing the entry of private players in 1993 and growth of the industry. The types of schemes, strengths, weaknesses, opportunities, and threats to mutual funds are also reviewed.
Mutual funds pool money from investors and invest it in a portfolio of securities like stocks, bonds, and other assets. Investors share the income and capital gains or losses proportionate to their investment. Mutual funds offer diversification, professional management, affordability, and liquidity. Some risks include potential underperformance, costs, and taxes on capital gains. In India, the Association of Mutual Funds promotes and protects the interests of mutual funds and investors. Long-term capital gains from mutual funds are tax exempt.
1) A mutual fund pools money from many investors to purchase securities like stocks and bonds. It allows small investors to participate in a diversified portfolio managed by professionals.
2) Mutual funds come in many varieties based on their investment objectives, such as income, growth, or balancing the two. They provide instant diversification, professional management, various investment options, and low costs.
3) While mutual funds reduce risk through diversification, investors still face market risk from factors like changing interest rates. Understanding a fund's risks and terms is important before investing.
The document discusses the concept, role, advantages, disadvantages and history of mutual funds in India. It covers the different phases of growth of the MF industry in India. It also summarizes the types of mutual funds, their structure and constituents like trustees, AMC, custodian and various regulations governing them.
The document provides an overview of mutual funds in India. It discusses the key entities involved in a mutual fund structure - sponsors initiate the fund, trustees oversee its operations and appoint the asset management company to manage investments. AMCs appoint other service providers like custodians, registrars, and accountants. The document also categorizes different types of mutual fund schemes based on their operations, returns, and investments. Overall it summarizes the basic concepts, participants, and classifications of mutual funds in India.
Mutual funds pool money from investors and invest in a portfolio of securities like stocks, bonds and other assets. The presentation discusses the history, growth and regulations of the Indian mutual fund industry. It covers key concepts like the flow cycle, organizational structure, expense ratios and types of mutual fund schemes. The goal is to educate investors about mutual funds and how they can provide diversification and professional management.
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
Presentation On Mutual funds and its typesGurmeet Virk
The document summarizes a seminar presentation on mutual funds and their types. It defines a mutual fund as a trust that pools investor savings and invests in stocks, bonds, and other securities. It outlines the history of mutual funds in India in four phases from 1964 to the present. It also describes the different types of mutual funds based on maturity period (open-ended or closed-ended) and investment objectives (growth, income, balanced, money market, gilt, and index funds). Finally, it lists some major Indian mutual fund companies and the advantages of investing in mutual funds.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. A mutual fund is operated by an investment company that raises money from investors and invests it in a group of assets. The three key features of mutual funds are:
1) Professional management: Mutual funds are professionally managed, providing investors access to investment opportunities that may not be available to individual investors.
2) Diversification: Mutual funds invest in a variety of securities, reducing risk by diversifying investments across different companies, industries, and types of assets.
3) Economies of scale: Mutual funds benefit from economies of scale, allowing individual investors access to a wide
A mutual fund is a trust that pools savings from investors who share a common financial goal. The money is invested in stocks, bonds and other securities, and the returns from these investments are shared by investors proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a diversified portfolio of securities at low cost.
This document provides an overview of mutual funds, including their concept, types, advantages, organization, investment strategies, and growth in India. It discusses key mutual fund topics such as open-ended and closed-ended schemes, growth, income, balanced, and money market funds. The document also summarizes the history and growth of the mutual fund industry in India, from its beginnings in 1964 to recent growth and future prospects, with the industry expected to reach $800 billion by 2022 based on past growth rates.
A mutual fund is a pool of money managed by a professional that invests in stocks, bonds, and other securities. It allows small investors to participate in a diversified portfolio. Benefits include professional management, diversification, liquidity, and flexibility. Fees include front-end loads, back-end loads, and management expense ratios. Major asset classes are money market, bond, balanced, dividend, equity, and specialty funds. Equity funds focus on Canadian, US, or international stocks using value, growth, or momentum investment styles.
The document provides information about mutual funds in India, including their history and structure. It discusses how a mutual fund is a trust that pools money from investors and invests it in securities like stocks and bonds. It then summarizes the five phases of growth of the mutual fund industry in India from 1963 to 2003 and how regulations evolved. It also outlines the key constituents of mutual funds in India - sponsors, trustees, asset management companies and custodians - and their roles. Finally, it categorizes mutual fund types by structure, nature and investment objective.
A mutual fund is a professionally managed investment scheme that pools money from many investors to purchase stocks, bonds and other securities. It allows individual investors to diversify their holdings and benefit from professional fund management at a low cost. The money collected is invested in different securities and the income and capital appreciation is shared by unit holders proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a basket of securities with a relatively small amount of money.
Mutual funds history, types, flow, and role of AIMFharshal pokaar
it contains meaning, flow of mutual fund, types of mutual fund, role played by (AIMF), history, And few industry examples of mutual fund
for example.;- sbi mutual fund,
kotak mutual funds,
etc
MUTUAL FUND MANAGEMENT
benefit of mutual funds how to work mutual fun sector in India
ORGANISATIONAL STRUCTURE OF MUTUAL FUNDS
in other country
other service of Mutual Fund
mf v/s bank investment
Mutal Fund Role As a TRUSTEES
TYPES OF MUTUAL FUNDS
INVESTMENT PROCEDURE IN MUTUAL FUNDS
RIGHTS AND DUTIES OF INVESTORS
INVESTMENT DECISION MAKING IN MUTUAL FUND
NET ASSET VALUE
SEBI REGULATIONS FOR NAV CALCULATION
VALUATION
AND
VALUATION NORMS
ACCOUNTING OF MUTUAL FUNDS
FINANCIAL STATEMENT OF MUTUAL FUNDS BALANCE SHEET
DIVIDEND DISTRIBUTION TAX (DTT)
SECURITIES TRANSACTION TAX (STT)
SECTION 80 C DEDUCTION
A mutual fund is a trust that pools savings from investors who share a common financial goal. The money is invested in securities like stocks, bonds, and other assets. Investors share the income and capital appreciation from these investments proportional to how many units they hold. Mutual funds offer diversification, professional management, and low costs, making them suitable for common investors. They allow instant diversification across different securities and sectors, reducing transaction costs. However, mutual funds also have costs and may underperform the market.
The document discusses mutual funds, providing definitions and explaining the structure and key participants. A mutual fund is an investment vehicle that pools money from investors to purchase securities like stocks and bonds. The structure involves a fund sponsor, trustees, an asset management company, custodian, and distributors. The document outlines the roles and responsibilities of these participants, as well as the history and types of mutual funds.
Mutual funds pool money from investors and invest in a portfolio of stocks, bonds, and other securities. The document discusses the meaning, benefits, history, growth in India, types, risks, net asset value, organization, regulations, and associations of mutual funds. It provides details on various mutual fund schemes, investments strategies like SIP and SWP, and buying and tracking mutual funds.
A mutual fund is a trust that pools money from many investors who share a common financial goal. Professional fund managers invest this pooled money in stocks, bonds, and other securities to achieve the fund's stated objectives. The main benefits of mutual funds include diversification of investments, professional management, low costs due to economies of scale, and convenience for small investors. However, mutual funds also have some disadvantages such as fees, inability to build a tailored portfolio, and delays in redeeming investments.
its a presentation which i and my friend have made on the Mutual Funds ,what are the various benefits of investing in MF , what are the various types of mutual funds ,how does one earn handsome returns in mutual funds, what the investor has to pay it's advantages and disadvantages and many more.............
Mutual funds allow investors to pool their money together and invest in a variety of securities like stocks, bonds, and money market instruments. They offer the benefits of diversification and professional management. The document discusses the different types of mutual funds such as equity funds, fixed income funds, and money market funds. It also covers mutual fund fees, risks, performance measurement metrics, and past performance of some Indian mutual funds. The top mutual fund houses in India have been using the market decline in August to buy stocks at attractive prices.
Mutual funds pool money from investors and invest it in a variety of securities like stocks, bonds, and money market instruments. The document discusses the key parties involved in mutual funds like investors, trustees, asset management companies, distributors, registrars, custodians, and depositories. It provides a history of mutual funds in India, describing the entry of private players in 1993 and growth of the industry. The types of schemes, strengths, weaknesses, opportunities, and threats to mutual funds are also reviewed.
Mutual funds pool money from investors and invest it in a portfolio of securities like stocks, bonds, and other assets. Investors share the income and capital gains or losses proportionate to their investment. Mutual funds offer diversification, professional management, affordability, and liquidity. Some risks include potential underperformance, costs, and taxes on capital gains. In India, the Association of Mutual Funds promotes and protects the interests of mutual funds and investors. Long-term capital gains from mutual funds are tax exempt.
1) A mutual fund pools money from many investors to purchase securities like stocks and bonds. It allows small investors to participate in a diversified portfolio managed by professionals.
2) Mutual funds come in many varieties based on their investment objectives, such as income, growth, or balancing the two. They provide instant diversification, professional management, various investment options, and low costs.
3) While mutual funds reduce risk through diversification, investors still face market risk from factors like changing interest rates. Understanding a fund's risks and terms is important before investing.
The document discusses the concept, role, advantages, disadvantages and history of mutual funds in India. It covers the different phases of growth of the MF industry in India. It also summarizes the types of mutual funds, their structure and constituents like trustees, AMC, custodian and various regulations governing them.
The document provides an overview of mutual funds in India. It discusses the key entities involved in a mutual fund structure - sponsors initiate the fund, trustees oversee its operations and appoint the asset management company to manage investments. AMCs appoint other service providers like custodians, registrars, and accountants. The document also categorizes different types of mutual fund schemes based on their operations, returns, and investments. Overall it summarizes the basic concepts, participants, and classifications of mutual funds in India.
Mutual funds pool money from investors and invest in a portfolio of securities like stocks, bonds and other assets. The presentation discusses the history, growth and regulations of the Indian mutual fund industry. It covers key concepts like the flow cycle, organizational structure, expense ratios and types of mutual fund schemes. The goal is to educate investors about mutual funds and how they can provide diversification and professional management.
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
Presentation On Mutual funds and its typesGurmeet Virk
The document summarizes a seminar presentation on mutual funds and their types. It defines a mutual fund as a trust that pools investor savings and invests in stocks, bonds, and other securities. It outlines the history of mutual funds in India in four phases from 1964 to the present. It also describes the different types of mutual funds based on maturity period (open-ended or closed-ended) and investment objectives (growth, income, balanced, money market, gilt, and index funds). Finally, it lists some major Indian mutual fund companies and the advantages of investing in mutual funds.
Mutual funds have a long history of success globally and in India. In the US alone, there are over 8,000 mutual funds managing $11.7 trillion in assets. In India, the mutual fund industry has grown in four phases since 1963 when the first fund (UTI) was established. The phases include the entry of public sector funds in 1987-1993, private sector funds in 1993-2003, and the bifurcation of UTI in 2003 leading to the current phase of consolidation and growth. The document provides an overview of the concept, organization, advantages, and types of various mutual fund schemes.
Mutual funds pool money from individual investors to purchase securities like stocks and bonds. They provide benefits like diversification and lower costs than individual investors can obtain. The mutual fund industry has grown dramatically in recent decades as more households invest in mutual funds for retirement. However, the industry has also faced scandals involving late trading, market timing, and other conflicts of interest between fund managers and investors.
A PERFORMANCE EVALUATION OF MUTUAL FUND Nirav Thanki
This document provides an overview of the mutual fund industry globally and in India. It discusses that mutual funds first originated in the United States in 1929 and have since grown to $12 trillion in assets globally by 2007, making them the largest financial investment vehicles. In India, the mutual fund industry was established in 1963 with the formation of Unit Trust of India. The industry has grown significantly since privatizing in 1993, and now has over 45 fund houses and approximately $20 billion in assets. The document outlines the key benefits of mutual funds for investors and discusses the continued growth potential of the industry in India.
1. The document is a sample paper containing 67 multiple choice questions about mutual funds. It covers topics like mutual fund types, regulations, risks and returns, performance evaluation, financial planning and asset allocation.
2. The questions test understanding of concepts like open-ended vs closed-ended funds, fund regulations set by SEBI, benchmarks used to evaluate performance, and strategies for different investor lifecycles.
3. The sample paper is a useful study guide for anyone looking to learn more about mutual funds and how to advise investors on choosing appropriate funds and asset allocations.
Mutual funds pool money from investors and invest in a portfolio of securities like stocks, bonds, and other assets. The presentation discusses the history, growth, and regulations of the Indian mutual fund industry. It provides an overview of key mutual fund concepts like the organizational structure, types of funds and schemes, and the importance of risk management, tracking performance, and evaluating funds.
The document provides an overview of mutual funds in India, including:
1) It defines mutual funds as pooled investment funds that allow investors to invest in a diversified portfolio managed by fund managers.
2) It describes the structure of mutual funds in India including sponsors, trustees, asset management companies, custodians, and SEBI regulations.
3) It outlines different types of mutual fund schemes according to structure, investment objectives, and maturity periods.
Mutual fund valuation and accounting notes @ bec doms Babasab Patil
The document discusses mutual funds and their accounting. It states that mutual funds pool investor money and invest it in stocks, bonds, and other securities. It is important for distributors and employees to understand how mutual funds are accounted for and how net asset value is calculated, as this allows them to assess fund performance and explain it to investors. The document also provides definitions of mutual funds from various sources to understand their meaning.
A mutual fund is a financial institution that pools money from shareholders and invests it in a portfolio of stocks, bonds, and other securities. The document defines mutual funds and describes their key features, benefits, types of schemes, roles of various parties involved like sponsors, trustees, asset management companies, and custodians. It also discusses the process of fund management including portfolio selection, revision, and calculation of returns.
A project report on mutual fund a safer investmentBabasab Patil
This document discusses mutual funds as a safer investment option compared to other alternatives. It provides an overview of mutual funds, including their structure as a pooled investment vehicle where investors own shares proportionate to their contribution. It also categorizes mutual funds based on their investment objectives such as equity funds, debt funds, balanced funds, and money market funds. Each category is associated with different risk-return profiles. The document aims to educate investors about mutual funds and their benefits over other savings instruments.
1) Mutual funds pool money from investors and invest in a portfolio of securities like stocks, bonds, and money market instruments. This allows individual investors to hold a diversified portfolio.
2) There are two main types of mutual funds - open-ended and closed-ended. Open-ended funds sell and redeem shares continuously and are not listed on stock exchanges. Closed-ended funds have a fixed number of shares that are traded on an exchange.
3) A mutual fund is made up of sponsors, trustees, an asset management company, and custodians. The sponsors initiate the fund and appoint the trustees and AMC. The AMC manages the fund's investments and the custodians hold the fund
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. The value of a mutual fund depends on the performance of the securities it holds. Mutual funds are operated by professional money managers and offer investors diversification and professional management. Investors purchase mutual fund shares based on the fund's net asset value per share and own a portion of the fund and its assets. Mutual funds charge annual fees to cover management and administrative costs.
A mutual fund is a vehicle that pools money from investors to invest in a portfolio of securities like stocks and bonds. It is managed by a professional investment management company. The portfolio is overseen by trustees representing the interests of investors. Mutual funds offer investors a low-cost way to invest in a diversified basket of securities. The main parties involved are investors, trustees, asset management companies, distributors, registrars and custodians. Mutual funds are classified by asset class, structure, investment goals and risk levels. The Indian mutual fund industry has grown significantly in size over the past decade.
This document is a project report submitted by Ankit Kumar for the partial fulfillment of an MBA degree. The project report analyzes and compares various mutual funds in India with a special focus on IIFL mutual fund. It includes sections on abbreviations, list of figures, certificates from the guide and organization where the project was conducted, and an undertaking by the student.
This document provides background information on capital markets and the history of stock exchanges. It discusses how capital markets help companies and governments raise long-term funds. It then gives a brief history of stock exchanges, noting that the Bombay Stock Exchange (BSE) established in 1875 is Asia's first stock exchange. It traces the origins of stock brokers back to the 12th century in France and discusses the earliest stock exchanges that emerged in the 13th-14th centuries in Belgium and Italy. The document emphasizes that the Dutch started the first joint stock companies and the first company to issue stocks and bonds was the Dutch East India Company in 1602 on the Amsterdam Stock Exchange.
Performance evaluation risk and return of mutual funds @ uti secureties pro...Babasab Patil
The document discusses a study on evaluating the performance of mutual funds with reference to risk and return. It contains an executive summary, introduction, literature review, objectives of the study, and limitations. The objectives are to evaluate the returns and associated risks of mutual funds, compare the performance of mutual funds from different companies, and evaluate mutual fund investment performance using risk-adjusted theoretical metrics. The study methodology uses secondary data from reports by UTI Securities and other websites.
Performance evaluation of mutual funds @ uti securetiesBabasab Patil
The document provides an overview of a study on evaluating the performance of mutual funds with reference to risk and return. The study was conducted at UTI Securities Ltd and analyzed equity diversified open-ended mutual fund schemes. The objectives of the study were to evaluate the returns and associated risks of mutual funds from different companies and evaluate investment performance using risk-adjusted measures. The document discusses the methodology, which involved collecting secondary data from reports by UTI Securities and other websites. It also provides context on mutual funds and classifications of mutual fund schemes.
A mutual fund is a collective investment scheme that pools money from many investors and invests it according to a stated objective. It allows investors to earn returns through professional fund management. A mutual fund is made up of an asset management company that manages the pooled funds, a trustee company, and investors. The key benefits of mutual funds include professional management, diversification, liquidity, and affordability for small investors. The value of a mutual fund is determined by the net asset value or NAV, which is calculated daily by dividing the total value of all the securities in the fund, plus any cash holdings minus expenses, by the total number of units issued.
The document is a project report on customer awareness of mutual funds and systematic investment plans (SIPs) submitted by Mohit Kumar Khandelwal. It provides an overview of mutual funds and SIPs, including how they work, their benefits, and the risks involved. It discusses the importance of regular investing through SIPs and using them to achieve financial goals. The report also briefly summarizes previous research on factors that influence investor decisions and awareness of mutual funds.
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The document provides an overview of mutual funds, including:
- What a mutual fund is and how it pools money from investors to invest according to its objectives. Investments are held in trust for the benefit of investors.
- The organization of mutual funds in India, including fund sponsors, trustees, asset management companies, custodians, and registrars.
- The different types of mutual funds based on structure (open-ended, closed-ended, interval), investment objectives (debt, equity, hybrid), and investment style (passive, active).
- The objectives of mutual funds including safety of capital, income generation, and growth.
- The advantages of mutual funds like professional management, dividend
This document provides an overview of mutual funds, including:
- Mutual funds pool money from investors and invest it in stocks, bonds, etc. on their behalf.
- Investors prefer mutual funds over directly investing in stocks because it reduces the time spent researching companies and allows for a more diversified, lower risk portfolio.
- Asset management companies (AMCs) professionally manage the investors' money in mutual funds and charge fees for their services.
- Mutual funds can be invested in either through a lump sum payment or systematic investment plan (SIP) which invests a fixed amount each month.
- The main types of mutual funds are open-ended and closed-ended funds, which differ based on whether
A mutual fund is a managed group of securities from several corporations that are owned by the mutual fund. Investors purchase shares in the mutual fund, and after operating costs, the earnings such as dividends and capital gains/losses from the owned securities are distributed to investors proportionate to their investment. Mutual funds allow individual investors to gain the advantages of diversification by investing in a variety of securities, which may not be possible with individual investments. Mutual funds can be open-end or closed-end, with open-end funds having a fluctuating number of shares and closed-end having a fixed number.
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University of North Carolina at Charlotte degree offer diploma Transcripttscdzuip
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5. Why did Mutual Funds come into existence?
An old Axiom :
“It is not wise to put all eggs into
one basket”
……… was probably in the minds of
those who formed the first mutual fund.
6. Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
7. Flow Cycle of a Mutual Fund
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Fund Schemes schemes Mutual Funds Aspects
of Mutual structure of History of Regulatory
Classification Risk-return
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
9. Flow Cycle of a Mutual Fund
Mutual Funds defined….a flow cycle
10. Flow Cycle explained…
• A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal.
• The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities.
• The income earned through these investments and the capital
appreciation realized 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.
11. Important Characteristics of Mutual Funds
• The ownership is in the hands of the investors who have
pooled in their funds.
• It is managed by a team of investment professionals and
other service providers.
• The pool of funds is invested in a portfolio of marketable
investments.
• The investors share is denominated by ‘units’ whose
value is called as Net Asset Value (NAV) which changes
everyday.
• The investment portfolio is created according to the
stated investment objectives of the fund.
12. Advantages of Mutual Funds to Investors
• Portfolio diversification
• Professional Management
• Reduction in Risk
• Reduction in Transaction costs
• Liquidity
• Convenience and Flexibility
• Safety – Well regulated by SEBI
13. Disadvantages of Mutual Funds to Investors
• No control over the costs. Regulators limit the
expenses of Mutual Funds. Fees are paid as percentage
of the value of investment.
• No tailor made portfolios.
• Managing a portfolio of funds. ( Investor has to hold a
portfolio for funds for different objectives ).
14. A mutual fund is not
1.A portfolio of stocks, bonds and other securities
2.A company that manages investment portfolios
3.A pool of funds used to purchase securities on behalf of investors
4.A collective investment vehicle
The Mutual fund is constituted as
A trust
A private limited company
An asset management company
A trustee company
Mutual fund can benefit from economics of scale because of
Portfolio diversification
Risk reduction
Large volume of trades
None of the above
15. A mutual fund is not
A portfolio of stocks, bonds and other
securities
A company that manages investment
portfolios
A collective investment vehicle
A pool of funds used to purchase securities
on behalf of investors
Skip
16. Correct Answer: A pool of funds used to
A mutual fund is not purchase securities on behalf of
investors
A portfolio of stocks, bonds and other
securities
A company that manages investment
portfolios
A collective investment vehicle
A pool of funds used to purchase securities
on behalf of investors
Next
17. A mutual fund is not
Correct Answer: A pool of funds used to
A portfolio of stocks, bonds and other securities on behalf of
purchase
securities investors
A company that manages investment
portfolios
A collective investment vehicle
A pool of funds used to purchase securities
on behalf of investors
Next
18. A mutual fund is not
A portfolio of stocks, bonds and other
securities Correct Answer: A pool of funds used to
A company that manages investment securities on behalf of
purchase
portfolios investors
A collective investment vehicle
A pool of funds used to purchase securities
on behalf of investors
Next
19. A mutual fund is not
A portfolio of stocks, bonds and other
securities
A company that manages investment
portfolios Correct Answer: A pool of funds used to
purchase securities on behalf of
A collective investment vehicleinvestors
A pool of funds used to purchase securities
on behalf of investors
Next
20. Diff. b/w MF and Direct Investment…
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Fund Schemes schemes Mutual Funds Aspects
of Mutual structure of History of Regulatory
Classification Risk-return
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
21. Diff. b/w MF and Direct Investment…
• Diversification is the key to success in equity investments. A diversified portfolio
serves to minimize risks. An individual investor may not have the capital to build
a diversified portfolio.
• Professional Management by mutual funds ensure that the best avenues are
tapped with the aid of comprehensive information and detailed research.
• Liquidity of mutual funds is high as you have daily repurchase options for open-
end funds.
• Transaction costs are lower in mutual funds as compared to direct investment
due to economies of scale.
• Convenience is high for mutual funds as they sell through service networks,
banks and other distributors. Many funds allow investors the flexibility to switch
between schemes within a family of funds.
• Blue Chip portfolio available to investors for as low as Rs. 500/-.
• High Service Standards maintained by mutual funds for unit administration.
• Transparency – High degree of transparency is maintained by the funds.
22. Balance sheet of a Bank and Mutual Fund
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Fund Schemes schemes Mutual Funds Aspects
of Mutual structure of History of Regulatory
Classification Risk-return
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
23. Balance sheet of a Bank and Mutual Fund
Difference between Bank and Mutual Fund
Mutual Fund Balance Sheet Bank Balance Sheet
Liabilities Assets Liabilities Assets
24. Balance sheet of a Bank and Mutual Fund
Difference between Bank and Mutual Fund
Mutual Fund Balance Sheet Bank Balance Sheet
Liabilities Assets Liabilities Assets
Unit Capital Investment in Share Capital Loans and
Financial Deposits Advances
Securities
25. Organizational Structure of Mutual Fund
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Fund Schemes schemes Mutual Funds Aspects
of Mutual structure of History of Regulatory
Classification Risk-return
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
28. How are Mutual Fund Structrured
• In India Mutual fund is the form of a Public Trust created under the
Indian trust Act. 1882.
• In India, Mutual funds are organized as trusts. The trust is either
managed by a Board of Trustees, or by a trustee company.
• The trustees hold the unit holders money in a fiduciary capacity.
(Money belongs to unit holders)
• In legal sense, the investors are the beneficial owners of
investments.
• There must be at least 4 members in the Board of Trustees
• At least 2/3 of the members of the board of trustees must be
independent.
• Trustee of one mutual fund can not be a trustee of another mutual
fund.
29. Organizational Structure of Mutual Fund
AMC
Savings
Trust Investments
Units
Unit holders Returns
Registrar
Trust
SEBI
Custodian AMC
31. Constituents of Mutual Fund
Sponsor
• Akin to the Promoter of the company,
• Contribution of minimum 40% of net worth of AMC,
• Posses sound financial record over five years period,
• Establishes the Fund,
• Gets it registered with the SEBI,
• Forms a trust, & appoints Board of trustee.
Trustees
• Holds assets on behalf of unit holders in trust,
• Trustees are caretaker of unit holders money,
• Two third of the trustees shall be independent persons (not associated with the
sponsor),
• Trustees ensure that the system, processes & personnel are in place,
• Resolves unit holders GRIEVANCES,
• Appoint AMC & Custodian, & ensure that all activities are accordance with the
SEBI regulation.
32. Constituents of Mutual Fund
Custodian
• Holds the fund’s securities in safekeeping,
• Settles securities transaction for the fund,
• Collects interest & dividends paid on securities,
• Records information on corporate actions.
Asset Management Company
• Floats schemes & manages according to SEBI,
• Can not undertake any other business activity, other than portfolio mgmt services,
• 75% of unit holders can jointly terminate appointment of AMC,
• At least 50% of independent directors,
• Chairman of AMC can not be a trustee of any MF.
Distributor / Agents
• Sell units on the behalf of the fund,
• It can be bank, NBFCs, individuals.
33. Constituents of Mutual Fund
Banker
• Facilitates financial transactions,
• Provides remittance facilities.
Registrar & Transfer Agent
• Maintains records of unit holders’ accounts & transactions
• Disburses & receives funds from unit holder transactions,
• Prepares & distributes a/c settlements,
• Tax information, handles unit holder communication,
• Provides unit holder transaction services.
Broker
• Broker/Dealer is an individual or institution that acts as a principal in
securities transaction.
• Take the orders to the exchanges / ECNs for execution and trade for their
own account and risk.
• When buying from a broker acting as a dealer, a customer receives securities
from that firm's inventory. Since most brokerage firms operate both as a
broker and as a Principal (dealer), the term broker/dealer is commonly used.
34. • Who is the primary guardian of unit holders’ funds/assets
– The AMC
– The Trustees
– The Registrars
– The custodians
• Transfer Agents of a mutual fund are not responsible for
– Issuing and redeeming units of the mutual fund
– Updating investor records
– Preparing transfer documents
– Investing the funds in securities markets
• The Custodian of a mutual fund:
– Is appointed for safekeeping of securities
– Need not be an entity independent of the sponsors
– Not required to be receive deliveries with SEBI
• Does not give or receive deliveries of physical securities
• The Mutual fund is constituted as
– A trust
– A private limited company
– An asset management company
– A trustee company
• Which of the following cannot be distributors of a mutual fund
– Sponsor
– Associate of sponsor
– Associate of AMC
– Employees of AMC
35. Classification of Mutual Fund Schemes
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
36. Classification of Mutual Fund Schemes
AMFI Classification of MF Schemes
Fund schemes Portfolio objectives
Growth & Income High Risk & High Return
Balanced Moderate Risk & Return
Liquid & Money Market Fixed Return
Gilt Zero Risk
ELSS Tax Saving
Fund of funds Additional diversification
ETFs Market Driven
Each category is classified into more sub-categories.
37. Classification of Mutual Fund Schemes
Classification of MF schemes
• By Structure
– Open-Ended – anytime enter/exit
– Close-Ended Schemes – listed on exchange, redemption after period of scheme is over.
• By Investment Objective
– Equity (Growth) – only in Stocks – Long Term (3 years or more)
– Debt (Income) – only in Fixed Income Securities, Gilt Funds – primarily in G-Sec
– Liquid/Money Market – Short-term Money Market (CPs, CDs, Treasury Bills)
– Balanced/Hybrid – Stocks + Fixed Income Securities (1-3 years)
• Other Schemes
– Tax Saving Schemes such as ELSS
– Special Schemes (ETFs, foreign funds)
• Risk
– Sectoral funds are most risky; money market funds are least risky
• Tenor
– Equity funds require a long investment horizon; liquid funds are for the short term liquidity
needs
38. Classification of Mutual Fund Schemes
By Structure
Open-ended plans
• Open-ended plans do not have a fixed maturity period.
• Investors can buy or sell units at NAV-related prices from and to the mutual fund on
any business day.
• These schemes have unlimited capitalization, there is no cap on the amount one can
buy from the fund and the unit capital can keep growing.
• These funds are not generally listed on any exchange.
• Open-ended plans are preferred for their liquidity. Such funds can issue and redeem
units any time during the life of a scheme.
• Any time entry option: An open-ended fund allows one to enter the fund at any time
and even to invest at regular
39. Classification of Mutual Fund Schemes
By Structure…. contd
Close-ended plans
• Close-ended plans have fixed maturity periods.
• Investors can buy into these funds during the period when these funds are open in
the initial issue.
• Such schemes cannot issue new units except in case of bonus or rights issue.
• After the initial issue, investor can buy or sell units of the scheme on the stock
exchanges where they are listed.
• The market price of the units could vary from the NAV of the scheme due to demand
and supply factors, investors’ expectations and other market factors intervals.
40. Classification of Mutual Fund Schemes
By Nature of Investment
• Equity Funds are those that invest in shares or equity of companies.
• Bond Funds invest in fixed income instruments issued by government or corporate
entities
• Hybrid Funds that invest in a combination of both stocks and bonds
• Money Market/Liquid Funds that invest in money market instruments
• Commodity Funds that invest in various commodities
• Real Estate Funds that invest in properties, land and building etc.
41. Classification of Mutual Fund Schemes
Types of Funds - By Investment Objective
Equity Debt Money Market
Equity Funds Fixed Income Money Market
Index Funds Funds Mutual Funds
Sector Funds GILT Funds
Balanced Funds Liquid Funds
42. Classification of Mutual Fund Schemes
Other Schemes
• 3 year lock in period
• Minimum investment of 90% in equity markets at all times
• So ELSS investment automatically leads to investment in equity shares.
• Open or closed ended.
• Eligible under Section 80 C upto Rs.1 lakh allowed
• Dividends are tax free.
• Benefit of Long term Capital gain taxation.
43. • Of the following fund types, the highest risk is associated with
– Balanced Funds
– Gilt Funds
– Equity Growth Funds
– Debt Funds
• A close ended mutual fund has a fixed
– NAV
– Fund Size
– Rate of Return
– Number of Distributors
• Equity Linked Savings Scheme does not have which of the following features?
– It entitles the unit holder to tax rebate
– The investment is locked in for 3 years
– A minimum stated level of investments is made in equity and equity related instruments
– None of the above
• Gilt funds invest in
– IT sector
– AAA securities
– Money market securities
– Government bonds
• When comparing a fund’s performance with that of its peer group, the following cannot be compared
– Two debt funds with 5 year maturities
– A broad-based equity fund with an IT Sector Fund
– A bond fund with bond index
– A government securities fund with a government security
44. Risk-return structure of schemes
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
46. Computing Mutual Fund’s Net Asset Value
For investors, the performance of their
investment depends on what happens to the
fund’s per unit value, or net asset value (NAV)
NAV = Market Value of Assets – Liabilities
Number of Shares Outstanding
47. Calculating a Mutual Fund’s Net Asset Value
Net Asset Value (NAV)
• Definition: Total value of the mutual fund’s stocks, bonds, cash,
and other assets minus any liabilities such as accrued fees, divided
by the number of shares outstanding
Example:
Stocks $35,000,000
Bonds $15,000,000
Cash $3,000,000
Total value of assets $53,000,000
Liabilities ($800,000)
Net worth $52,200,000
Outstanding shares 15 million
NAV = $52,200,000/15,000,000 = $3.48
48. Calculating a Mutual Fund’s Net Asset Value
Example
• An open ended fund was purchased when its
NAV was Rs. 22. One year later, its NAV was
Rs. 24. The annualised percent NAV change is
______
• Answer
• % change in NAV = ( 24 -22) *100 = 9.09%
» 22
49. Calculating a Mutual Fund’s Net Asset Value
• Purchase price Rs. 22 per Unit
• NAV at year end Rs. 23 per Unit
• Interim Div. Rs. 3
• Ex.-Div. NAV Rs. 21
• Total Return=?
• Assume investment of Rs. 10000
• Step 1: Initial Units alloted =10000/22=454.55
• Step 2:Total Div.=454.55*3=1363.65
• Step 3: Additional Units=1363.65/21=64.94
• Step 4:Total Units=454.55+64.94=519.49
• Step 5:Withdral Amt. =519.49*23=11947.17
• Gain =11947.17-10000=1947.17
• Gain of 1947.17 on the investment of Rs. 10000
• So that on the investment of Rs. 100 gain is 19.47
• Ans:19.47%
50. Investing in NFO
Its new (Old wine in a new bottle, participate in India’s
growth potential)
Its at Rs 10 i.e its cheaper than a existing fund whose NAV
is Rs.110
My neighbour is buying it
My distributor / agent has strongly recommended it.
I can make good profit in the short term
Actually there is no difference/benefit an individual has by
investing in an existing Mutual fund or New Fund Offering
52. Mutual Fund Investment Modes
Systematic Investment Plan (SIP)
Invest a fixed sum every month. (6 months to 10 yearsthrough post-
dated cheques or Direct Debit facilities)
Fewer units when the share prices are high, and more units when the
share prices are low. Average cost price tends to fall below the average
NAV.
Systematic Transfer Plan (STP)
•Invest in debt oriented fund and give instructions to transfer a fixed sum,
at a fixed interval, to an equity scheme of the same mutual fund.
Systematic Withdrawal Plan (SWP)
56. • The amount required to buy 100 units of a scheme having an entry load of 1.5% and NAV of Rs. 20 is:
– Rs. 2000
– Rs. 2015
– Rs. 1985
– Rs. 2030
• A fund’s investments at market value total Rs. 700 crores, Total liabilities stand at Rs. 50 lacs and the number of units outstanding is 28 Crores. What
is the NAV?
– Rs. 30.19
– Rs. 24.98
– Rs. 32.15
– Rs. 40.49
• An Investor buys one unit of a fund at an NAV of Rs. 20. He receives a dividend of Rs. 3 when the NAV is Rs. 21. The unit is redeemed at an NAV of Rs.
22. Total Return is
• a. 25.71%
– Rs. 27.51%
• 21.27%
• Rs. 21.75%
• A funds NAV is affected by
– Purchase and sale of investment securities
– Valuation of all investment securities held
– Units sold or redeemed
– All of the above
– If the NAV of an open-ended fund was Rs. 16 at the beginning of the year and Rs.22 after 13 months, the annualized change in NAV is
– 6.0%
– 34.6%
– 40.6%
– 37.5%
57. History of Mutual Funds
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
58. History of Mutual Funds
Global
• First started in 1924
• Nearly 8,300 mutual funds available today
• More mutual funds in existence today than stocks listed on NYSE and AMEX combined
• Nearly half of all U.S. households own mutual funds
INDIA
UTI sole player in the industry, created by an Act of Parliament ,1963
1963 – 1987
UTI launches first product Unit Scheme 1964
In 1987 Public Sector Banks and FI's got permission to set up MF.
1987 - 1993
SBI mutual fund was the first non -UTI mutual fund
In 1993, Mutual Fund Industry was open to private players.
1993 - 1996 SEBI's first set of regulations for the industry formulated in 1993
Significant innovations, mostly initiated by private players
Implementation of new SEBI regulations led to rapid growth
Bank mutual funds were recast as per SEBI guidelines
1996 - 1999
UTI came under voluntary SEBI supervision.
Dividends made tax free in 1999.
Rapid growth, significant increase in corpus of private players
1999 - 2000 Tax break offered created arbitrage opportunities
Bond funds and liquid funds registered highest growth
60. History of Mutual Funds
Phases of Mutual Fund Industry in India
1964
1987
1993
2009 ?
61. History of Mutual Funds
Fig 1.1: Total Net Assets
Fig 1.2: Global MF Assets by Fund
Type
62. Importance points
• IN USA, a MF is constituted as an investment company and an
investor buys the share of the fund.
• In USA, all mutual funds are open ended.
• In USA, funds are also classified as Tax Exempt and Non Tax
Exempt Funds
• In India, classified as Open – Closed ended, Load and No Load
Funds.
• Mutual Fund is NOT a company, it can be called as a portfolio
of stocks, bonds and other securities or it can be called as
pool of funds used to purchase securities on behalf of
investors or a collective investment vehicle.
63. • After UTI, the first mutual funds were started by
a. Private sector banks
b. Public sector banks
c. Financial institutions
d. Non-banking Finance Companies
• The private sector was granted permission to enter the mutual fund industry in
a. 1992
b. 1993
c. 1998
d. 1995
• In US all Mutual Funds are classified as
a) Close Ended
b) Open Ended
c) Both
64. Regulatory Aspects
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
65. Regulatory Aspects
Regulatory Aspects
Regulations - India
• Governed by SEBI (Mutual Fund) Regulation 1996
– All MFs registered with it, constituted as trusts ( under Indian Trusts
Act, 1882)
• Bank operated MFs supervised by RBI too
• AMC registered as Companies registered under Companies Act, 1956
• SEBI- Very detailed guidelines for disclosures in offer document, offer
period, investment guidelines etc.
– NAV to be declared everyday for open-ended, every week for closed
ended
– Disclose on website, AMFI, newspapers
– Half-yearly results, annual reports
– Select Benchmark depending on scheme and compare
66. Regulatory Aspects
Regulations - US
• SEC- Securities Exchange Commission is the regulatory body of security
industry including Mutual Fund.
• The mission of the U.S. Securities and Exchange Commission is to protect
investors, maintain fair, orderly, and efficient markets, and facilitate
capital formation.
• The SEC oversees the key participants in the securities world, including
securities exchanges, securities brokers and dealers, investment advisors,
and mutual funds. Here the SEC is concerned primarily with promoting the
disclosure of important market-related information, maintaining fair
dealing, and protecting against fraud.
67. Regulatory Aspects
Regulations - US
Mutual funds are regulated by four primary laws:
– Securities Act of 1933: specifies disclosure requirements
– Securities Exchange Act of 1934: details antifraud rules
– Investment Company Act of 1940: requires registration and minimal
operating standards
– Investment Advisors Act of 1940: regulates fund advisors
Mutual funds are the only companies in the U.S.that are required by law
to have independent directors, as follows (2001 SEC rules)
– Independent directors must constitute a majority of the board
– Independent directors select and nominate other independent directors
– Legal counsel to the independent directors must also be independent
68. Compliance with SEBI’s Requirements
• Sebi has categorised obligations of Trust into General Due
Diligence and Specific Due Diligence.
• General Due Diligence – Due care in appointing AMC
Directors, observing irregularities in functioning. The purpose
is to ensure that trust properties are protected by competent
persons and agencies. Ensuring that appointed constituents
are duly regd. With SEBI.
• Specific Due Diligence – Trustees must appoint independent
auditors and obtain periodic audit reports. To obtain
Compliance Test reports from the AMC once every 2 months.
To prescribe a Code of Ethics for Trustees and AMC
personnel.
69. Compliance with SEBI’s Requirements
• Only SEBI registered AMC can be appointed as investment managers of
mutual funds
• AMC must have a minimum net worth of Rs. 10 Cr., at all times
• An AMC cannot be an AMC or Trustee, of another Mutual Fund
• AMC’ s cannot indulge in any other business, other than that of asset
management
• At least half of the members of the Board of an AMC, have to be
independent
• The 4th Schedule of SEBI regulations spells out rights and obligations of
both trustees and AMC’s
70. Mutual Fund AMC appointment
• The trustees, on the advice of the sponsors usually
appoint the AMC
• The AMC is usually a private limited co., in which the
sponsors and their associates or JV partners ,are
shareholders
• The AMC has to be a SEBI registered entity, with a
minimum net worth of Rs. 10 Cr.
• The trustees sign an investment management agreement
with the AMC, which spells out the functions of the AMC
71. How are Indian mutual funds organized?
• Though the trust is the mutual fund, the AMC is its
operational face
• The AMC is the first functionary to be appointed and is
involved in the appointment of all other functionaries
• The AMC structures the mutual fund products, markets
them and mobilises the funds, manages the funds and
services the investors
• All the functionaries are required to report to the trustees
who lay down the ground rules and monitor their working
72. What are the restrictions on the AMC?
• AMC’ s cannot launch a scheme without the prior approval
of the trustees
• AMC’ s have to provide full details of investments by
employees and Board members in all cases where the
investment exceeds Rs.1 Lakh
• AMC’ s cannot take up any activity that is in conflict with
the activities of the mutual fund
73. Portfolio Management Process
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
75. Risk Management
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
76. Risk Management
Risk Management Function
Risk category Risk factors
Volatility in performance, portfolio concentration,
Fund management Interest rate movement, liquidity risk & credit
risk.
Deal error, settlement problem, NAV & fund pricing
Operations
error, inaccurate financial reporting, fraud.
Customer Error in deal processing, fraud .
Marketing & distribution
New product development, selling & distribution
Other business risk Critical knowledge loss, skills shortage, third party
•Disaster recovery & business contingency plans. risk
•Insurance against third party loss (R&TA), arising from error & omission.
77. Investment Checklists
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
78. Investing Checklist
Investment Checklists
• Draw up your asset allocation
– Financial goals & Time frame (Are you investing for retirement?
A child’s education? Or for current income? )
– Risk Taking Capacity
• Identify funds that fall into your Buy List
• Obtain and read the offer documents
• Match your objectives
– In terms of equity share and bond weightings, downside risk
protection, tax benefits offered, dividend payout policy, sector focus
• Check out past performance
– Performance of various funds with similar objectives for at least 3-5
years (managed well and provides consistent returns)
79. Investing Checklist
Investment Checklists
• Think hard about investing in sector funds
– For relatively aggressive investors
– Close touch with developments in sector, review portfolio regularly
• Look for `load' costs
– Management fees, annual expenses of the fund and sales loads
• Does the fund change fund managers often?
• Look for size and credentials
– Asset size less than Rs. 25 Crores
• Diversify, but not too much
• Invest regularly, choose the S-I-P
– MF- an integral part of your savings and wealth-building plan.
80. Mutual Fund Comparison
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
81. Mutual Fund Comparison
Mutual Fund Comparison
Mutual Fund Comparison
• Absolute returns
– % difference of NAV
– Diversified Equity with Sector Funds– No
• Benchmark returns
– SEBI directs
– Fund's returns compared to its benchmark
• Time period
– Equal to time for which you plan to invest
– Equity- compare for 5 years, Debt- for 6 months
• Market conditions
– Proved its mettle in bear market
82. Expenses
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
83. Mutual Fund Comparison
Expenses
Expenses of Mutual Fund
Accounted for in FUND RETURN Not included in FUND RETURN
Management fee* Front end sales load
Group fee* Back end sales load
Performance fee* Transaction fee
Administrative fee* Redemption fee
Brokerage costs Account maintenance fee
Interest costs Bid ask spreads
• An asterisk * indicates fee which is included in a fund’s expense ratio.
• As per SEBI Rule, expense ratio should be 2.5% for equity & 2.25% for
debt fund of fund value.
84. Mutual fund fees & expenses?
• Two types of loads in Mutual Fund
Front end load – Fees that is charged at the time of investing in a
mutual fund. Front-end loads reduce the amount of your investment. For
example, let's say you have $1,000 and want to invest it in a mutual fund
with a 5% front-end load. The $50 sales load you must pay comes off the
top, and the remaining $950 will be invested in the fund
Back end load – Fees charged at the time of redeeming out of a mutual
fund.For example, the above $950 grows to $5000 in 2 years. There is
back end load of 5%. Hence $ 250 will be deducted from the total amount
and the investor will receive $4750.
There are some other fees which Mutual fund charges to the investor.
Although these fees are only a few percentage points a year and seem like
a minor expense, they create a serious drain on the performance over a
period of years.
84 Limited Access
85. Mutual fund fees & expenses.. Contd
• Contingent deferred sales charge
A mutual fund may charge sales charges that are reduced at certain
time intervals. For example, the fund may charge 6% of the sale price
the first year after the shares are bought. Each year thereafter the fee
would be reduced by 1% until no fee would be charged. This is an
incentive for investors to leave their money in the fund.
• Management fees
Mutual funds may charge fees to cover expenses such as advertising,
brokers' costs and toll-free telephone lines. These are 12b-1 fees,
regulated by law.
• Transfer fees
A fee is charged each time the investor transfers money within the
company .
85 Limited Access
86. What are Initial Issue Expenses
Expenses that are incurred in the launch of the fund are
called as initial issue expenses.
∙ The costs of registration and fund formation
∙ Legal and advisory expenses
∙ Costs of launching the scheme
∙ Advertisement and promotion expenses
∙ Distribution costs
∙ Commissions to selling agents
SEBI imposes a ceiling of 6% on these expenses.
87. What are Initial Issue Expenses…contd
Can the Fund be launched without bearing any initial issue
expenses ?
∙ Yes
∙ Such funds are called as no load funds
∙ AMCs can charge an investment management fee, which
is 1% higher than the statutory limit, in this case.
88. Update on Initial Issue Expenses
Latest changes on Initial Issue
Expenses
• IIE will be permitted for closed ended schemes only and such
scheme will not charge Entry load
• IN CES, IIE shall be amortized on a weekly basis over the
period of scheme.
• IN OES, the sales, marketing and other expenses of sales
should be met from the entry load and not IIE
89. Mutual Fund Expenses
Can the AMC charge all the expenses that it incurs, to the
income of the fund ?
• No. There are two levels of restrictions
• At the first level only certain kinds of expenses, that are identified as
having been incurred for the conduct of the business of the fund, can be
charged to the fund.
• The second level of regulation refers to the limit on the total expenses,
that can be charged to the fund
Following is the maxmum limit on the expenses
For net assets up tp Rs. 100 Cr 2.50%
For the next Rs 300 Cr. Of net assets 2.25%
For the next Rs 300 Cr. Of net assets 2%
For the remaining net assets 1.75%
On debt funds the limits on expenses are lower by 0.25%
90. Mutual Fund Expenses
What are the fees charged by the AMC ?
The fees are regulated by SEBI as follows:
• For the first Rs.100 Cr. Of net assets: 1.25%
• For the net assets exceeding Rs. 100 Crore: 1.00%
• If the AMC does not charge any of the initial issue
expenses to the fund, it can charge the scheme a
management fee, that is 1% higher than the above rates
91. Mutual fund fees & expenses
• Two types of loads in Mutual Fund
Front end load – Fees that is charged at the time of investing in a
mutual fund. Front-end loads reduce the amount of your investment. For
example, let's say you have $1,000 and want to invest it in a mutual fund
with a 5% front-end load. The $50 sales load you must pay comes off the
top, and the remaining $950 will be invested in the fund
Back end load – Fees charged at the time of redeeming out of a mutual
fund.For example, the above $950 grows to $5000 in 2 years. There is
back end load of 5%. Hence $ 250 will be deducted from the total amount
and the investor will receive $4750.
There are some other fees which Mutual fund charges to the investor.
Although these fees are only a few percentage points a year and seem like
a minor expense, they create a serious drain on the performance over a
period of years.
91 Limited Access
92. Mutual fund fees & expenses continued….
• Contingent deferred sales charge
A mutual fund may charge sales charges that are reduced at certain
time intervals. For example, the fund may charge 6% of the sale price
the first year after the shares are bought. Each year thereafter the fee
would be reduced by 1% until no fee would be charged. This is an
incentive for investors to leave their money in the fund.
• Management fees
Mutual funds may charge fees to cover expenses such as advertising,
brokers' costs and toll-free telephone lines. These are 12b-1 fees,
regulated by law.
• Transfer fees
A fee is charged each time the investor transfers money within the
92 Limited Access
93. Tracking Mutual Funds
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
94. Tracking Mutual Funds
Keeping Track…
• Filling up an application form and writing out a cheque = end of the story… No!
• Periodically evaluate performance of your funds
– Fact sheets and Newsletters
– Websites such as www.valueresearchonline.com,
www.mutualfundsindia.com, www.morningstar.in, www.lipperweb.com et
al.
– Newspapers
– Professional advisor
95. Warning Signals
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
96. Warning Signals
Warning Signals
• Fund's management changes;
• Performance slips compared to similar funds;
• Fund's expense ratios climb;
• Beta, a technical measure of risk, also climbs;
• Independent rating services reduce their ratings of the fund;
• It merges into another fund;
• Change in management style or a change in the objective of the fund.
97. AUM movements in India
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
98. AUM movements in India
Movement of AUMs in different categories over a period of time
Stock Funds have become a mainstream product.
Liquid Plus Funds and FMPs have seen aggressive inflows due to regulatory
changes.
New asset classes like ETFs and FoFs have emerged.
99. AUM movements in India
Indian Asset Management Industry - Growth in Assets
Total Assets Under Management as on March 2009 – Rs 493286 crores
Total No. of players - 36
100. Penetration of Mutual Funds
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
101. Penetration of Mutual Funds
Penetration vis-à-vis Other Financial Products
Note: Penetration of Mutual Funds is still low as compared to Banks and
Insurance Companies.
102. What Mutual Funds are not?
Flow Cycle of a Diff. b/w MF Balance sheet Organizational
Mutual Fund and Direct of a Bank and Structure of a
Investment Mutual Fund Mutual Fund
Regulatory History of Risk-return Classification
Aspects Mutual Funds structure of of Mutual
in India schemes Fund Schemes
Portfolio Risk Investments Mutual Fund
Management Management Checklists Comparison
Process
AUM Warning Tracking
movements in Signals Mutual Funds Expenses
India
Penetration of What Mutual
Mutual Funds Funds are not?
103. What Mutual Fund are not
• MFs are not ‘get rich quick investments’
• MFs are not ‘risk free investment’
• MFs are not ‘assured return investment’
• MFs are not ‘a universal solution to all investment needs’
104. Myths about Mutual Funds
•Mutual Funds invest only in shares.
• Mutual Funds are prone to very high risks/actively traded.
• Mutual Funds are very new in the financial market.
• Mutual Funds are not reliable and people rarely invest in
them.
• The good thing about Mutual Funds is that you don’t have
to pay attention to them.
105. Factors to be considered before choosing a Mutual Fund
Track record / experience of the fund house
Stability of the investment team / adherence to an
investment process
Consistent performance of the fund across market cycles
Disclosure and service levels offered by the fund house
Relative performance among its peer group (across time
periods)
Investment style (whether it suits your risk profile)
Look for Expense Ratio, Exit load etc
A regular mutual fund invests in stocks, bonds and fixed income securities depending on its objective. Hence the investor gets an opportunity to participate in these market-linked instruments while utilizing the fund manager's expertise. Fund of funds further extends this concept wherein a mutual fund invests in units of other mutual fund schemes. So what is motive behind having a FoF? The answer is - ?Diversification?. Fund of funds takes diversification to a new level.
Contra with Contra… and not contra with SEBI -mandatory for funds to have a benchmark– lets say Sensex… fund should beat Sensex if the Sensex drops by 10% over a period of two months and during that time, the fund's NAV drops by only 6%, then the fund is said to have outperformed the benchmark. Report submitted to SEBI every 6 months