1. A mutual fund is a trust that pools savings from investors and invests them in stocks, bonds, and other securities.
2. SEBI regulates mutual funds in India and defines a mutual fund as a trust formed by a sponsor to raise money through the sale of units to the public and invest in securities.
3. The money collected is invested in capital market instruments and the income earned is shared by unit holders proportionate to their investment. This provides investors an opportunity to invest in a diversified basket of securities at low cost.
Here I am Sharing Presentation about Mutual Fund Which is beneficial for Finance Student. Who one want to know details of mutual fund can see this slide this will be helpful to the student of finance.
All The Best
A mutual fund is a pool of money managed by professionals to invest in securities like stocks and bonds. Investors purchase units of the fund. Benefits include professional management, diversification, liquidity, and flexibility. Fees can be front-end loads or back-end loads. Funds invest in major asset classes like money market, bonds, balanced, dividend, equity, and specialty funds. Performance is measured using models like Treynor, Sharpe, Jensen, and Fama that consider risk-adjusted returns. Mutual funds have grown significantly in India in recent years as more savings are channeled into the sector.
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.
Certificates of deposit (CDs) are short-term deposit instruments issued by banks and financial institutions to raise large amounts of money. CDs can be issued with maturities ranging from 7 days to 12 months by banks and 1 to 3 years by financial institutions. They must be purchased in amounts of at least Rs. 1 lakh. Banks and corporations use CDs to mobilize funds when needed, such as providing loans. CDs provide liquidity to banks while offering depositors higher returns than regular fixed deposits. However, the CD market in India has yet to be fully developed due to the lack of a secondary market and low usage despite being available for some time.
The document discusses securities markets and the types of securities traded within those markets. It defines what a security is and outlines the main types: equity securities (stocks), debt securities (bonds), and derivatives. It then discusses primary and secondary markets, how new securities are issued in the primary market and previously issued securities are traded in the secondary market. The roles of security markets are also summarized as providing liquidity, facilitating capital formation and business ownership, and price discovery. Reforms to India's security markets are highlighted such as the establishment of regulatory bodies and growth of electronic trading.
The document provides an overview of the Indian financial system and its key components. It discusses the formal and informal financial sectors in India. The formal financial system includes financial institutions, markets, instruments, and services. It describes some of the major financial institutions in India as well as money markets and capital markets. It also summarizes some common financial instruments and services that make up the Indian financial system.
Clearing and settlement involves matching trades, determining obligations, and exchanging securities for cash. It is facilitated by clearing members, clearing banks, depositories, and the clearing corporation. Key risks include counterparty default and liquidity issues. The clearing corporation manages these risks through activities like trade confirmation, multilateral netting to determine obligations, collecting margins, and imposing limits. It acts as the central counterparty to assume default risk and ensure settlement is completed as required by market rules.
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.............
Here I am Sharing Presentation about Mutual Fund Which is beneficial for Finance Student. Who one want to know details of mutual fund can see this slide this will be helpful to the student of finance.
All The Best
A mutual fund is a pool of money managed by professionals to invest in securities like stocks and bonds. Investors purchase units of the fund. Benefits include professional management, diversification, liquidity, and flexibility. Fees can be front-end loads or back-end loads. Funds invest in major asset classes like money market, bonds, balanced, dividend, equity, and specialty funds. Performance is measured using models like Treynor, Sharpe, Jensen, and Fama that consider risk-adjusted returns. Mutual funds have grown significantly in India in recent years as more savings are channeled into the sector.
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.
Certificates of deposit (CDs) are short-term deposit instruments issued by banks and financial institutions to raise large amounts of money. CDs can be issued with maturities ranging from 7 days to 12 months by banks and 1 to 3 years by financial institutions. They must be purchased in amounts of at least Rs. 1 lakh. Banks and corporations use CDs to mobilize funds when needed, such as providing loans. CDs provide liquidity to banks while offering depositors higher returns than regular fixed deposits. However, the CD market in India has yet to be fully developed due to the lack of a secondary market and low usage despite being available for some time.
The document discusses securities markets and the types of securities traded within those markets. It defines what a security is and outlines the main types: equity securities (stocks), debt securities (bonds), and derivatives. It then discusses primary and secondary markets, how new securities are issued in the primary market and previously issued securities are traded in the secondary market. The roles of security markets are also summarized as providing liquidity, facilitating capital formation and business ownership, and price discovery. Reforms to India's security markets are highlighted such as the establishment of regulatory bodies and growth of electronic trading.
The document provides an overview of the Indian financial system and its key components. It discusses the formal and informal financial sectors in India. The formal financial system includes financial institutions, markets, instruments, and services. It describes some of the major financial institutions in India as well as money markets and capital markets. It also summarizes some common financial instruments and services that make up the Indian financial system.
Clearing and settlement involves matching trades, determining obligations, and exchanging securities for cash. It is facilitated by clearing members, clearing banks, depositories, and the clearing corporation. Key risks include counterparty default and liquidity issues. The clearing corporation manages these risks through activities like trade confirmation, multilateral netting to determine obligations, collecting margins, and imposing limits. It acts as the central counterparty to assume default risk and ensure settlement is completed as required by market rules.
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.............
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.
This document discusses various investment avenues available in India. It outlines essential features of investments such as safety, liquidity, income, growth, legality and tax implications. Some key investment alternatives mentioned include bank deposits, post office schemes, company fixed deposits, public provident fund, equity shares, bonds, money market instruments, financial derivatives, mutual funds, life insurance and real estate. The document provides brief descriptions of these different investment types.
This document provides an introduction to investment management. It defines investment as committing funds to achieve additional income or growth over time. Investments involve allocating assets, expecting positive returns, and having a long time frame. Investments can range from safe to risky. The objectives of investment include achieving good returns, reducing risk, liquidity, safety of funds, and hedging against inflation. Favorable factors for investment include legal safeguards, a stable currency, financial institutions and services, business organization structures, and choice of investment. The document outlines various investment media including direct, indirect, variable principal, and non-security investments. It also discusses features of an investment program such as safety, liquidity, income stability, and appreciation
This document discusses capital structure and financial markets, specifically the primary market. It defines the primary market as the market for new issuers, where companies can directly issue shares, bonds, or other securities to raise capital. The document outlines the key participants and processes in the primary market in Nepal, including requirements for disclosure, underwriting, and issue procedures that must follow the Company Act and SEBON guidelines. Overall, the primary market provides an important channel for companies and governments to raise funds for investment and growth.
The depository system in India allows investors to hold securities electronically in depository accounts, eliminating the need for physical certificates. Introduced in 1996, depositories like NSDL and CDSL hold securities on behalf of investors through depository participants like banks and brokers. This electronic book-entry system reduces costs and risks compared to physical certificates, allowing faster and more convenient transfer of securities and funds.
Commercial paper (CP) is an unsecured, short-term debt instrument issued by corporations to meet short-term liabilities. CP was introduced in India in 1990 to provide highly rated corporations an alternative to bank borrowing. Only reputable corporations with good credit ratings can issue CPs to borrow at lower interest rates than banks and save on financing costs. CPs can be issued for periods between 15 days to one year, making them suitable for meeting working capital or current asset needs.
The document provides an overview of the Over The Counter Exchange of India (OTCEI). It discusses that OTCEI is an electronic stock exchange comprised of small and medium sized firms looking to gain access to capital markets. Some key points covered include OTCEI's history and establishment in 1990, its features like use of modern technology and all-India network, listing requirements for companies, advantages like access to capital, and disadvantages such as poor initial trading volumes and liquidity.
This document provides an overview of the money market, including its key components, instruments, and structure in India. The money market deals in short-term financial assets that can be easily converted into cash. It includes treasury bills, certificates of deposit, commercial paper, banker's acceptances, and repurchase agreements. The money market helps facilitate short-term borrowing and lending, provides liquidity management for the central bank, and supports business financing needs. The structure of the Indian money market involves both organized and unorganized sectors, with the Reserve Bank of India playing a key regulatory role.
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities. The main benefits are professional management, diversification, liquidity, and low costs. A mutual fund is operated by a sponsor, trustee, asset management company, custodian, and registrar. There are different types of funds categorized by structure (open or closed-ended), investment objectives (growth, debt, balanced), and other factors. Mutual funds provide investors an opportunity to participate in markets and support the economy.
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities. The money earned through investments and any capital appreciation is shared by unit holders proportionate to how many units they own. The document discusses the history of mutual funds in India from 1964 to present. It describes open-ended and closed-ended funds, as well as growth, income, balanced, and money market funds. The advantages of mutual funds include diversification, professional management, convenience, and tax benefits, while the disadvantages include costs and lack of control. Systematic investment plans allow regular investing of small amounts to achieve long-term goals through rupee cost averaging and the power of compounding.
This document provides an overview of mutual funds, including their key concepts, roles, how they operate, types of funds, legal structure in India, and distribution channels. The main points are:
- A mutual fund pools money from investors and invests it in stocks, bonds and other securities, with the fund managed by a professional on behalf of investors.
- Mutual funds assist investors in earning income, provide diversification, and help raise money for governments and companies through investments.
- The legal structure of mutual funds in India involves a trust with sponsors, trustees, an asset management company, custodian and registrar & transfer agent. Key documents include SID, SAI and KIM.
The document discusses stock exchanges and their functions. It defines a stock exchange as an organization established to assist, regulate, and control trading of securities. It describes how stock exchanges host markets where stocks, bonds, and other financial instruments are traded between buyers and sellers during business hours. Exchanges impose rules on member firms and brokers. The key functions of stock exchanges include providing liquidity and marketability for existing securities, determining prices through the forces of supply and demand, ensuring the safety of transactions through compliance with exchange rules and regulations, contributing to economic growth by providing investment opportunities, and spreading information about listed companies.
A stock broker is an individual who works for a brokerage firm and facilitates the buying and selling of stocks, bonds, and other securities between clients and on stock exchanges. There are two main types of stock brokers - full-service brokers, who provide financial advice and recommendations in addition to executing trades, and discount brokers, who only execute trades without providing advice. Stock brokers play an important role in the stock market by acting as intermediaries between buyers and sellers and using their market knowledge to help clients invest strategically for profit.
A mutual fund is an investment tool that pools money from many investors and invests it in stocks, bonds, and other securities. The document summarizes the history and growth of mutual funds in India from 1963 to the present in four phases. It describes the types of mutual funds including by maturity, investment objective, and advantages for investors such as portfolio diversification, professional management, reduced costs and risk, and liquidity.
Investment Securities. alternatives & attributesASAD ALI
This document discusses investment alternatives and their attributes. It describes direct and indirect investing. Direct investing includes non-marketable assets like savings deposits and money market securities like T-bills. Capital market securities include fixed income bonds and equity securities like stocks. Indirect investing is through investment companies like mutual funds. The document also discusses different types of stocks and attributes investors should consider like risk, return, marketability and taxes to evaluate investments.
1. The document discusses the growth and development of derivatives markets in India, including key milestones like SEBI permitting derivatives trading on Indian stock exchanges in 2000 and the introduction of various derivatives products over subsequent years.
2. It provides background on regulations governing derivatives trading in India and the objectives of regulation, including protecting investors and market integrity.
3. The document outlines the objectives of the study, which include understanding the Indian derivatives market scenario, analyzing whether derivatives have achieved their purpose, and suggesting methods based on observations. It discusses the scope and limitations of the study.
The document discusses India's depository system. It begins by outlining problems with physical share certificates like theft, delays, and paperwork. It then summarizes the Depositories Act of 1996 which established depository services in India. Depositories dematerialize physical shares and allow for electronic trading and transfer of shares. Major players in India's depository system are the National Securities Depository Limited and Central Depository Services (India) Limited. Benefits of the depository system include safety, immediate transfers, and reduced costs.
This document provides an overview of mutual funds, including:
1) Mutual funds pool money from investors and invest it in stocks, bonds, and other securities to spread out risk. Profits and losses are shared by investors proportionate to their investment.
2) Mutual funds offer benefits like diversification, professional management, liquidity, and lower costs. They allow small investors access to a wide range of investments.
3) There are different types of mutual fund schemes categorized by their investments, objectives, and other features. Funds invest in stocks, bonds, sectors, indexes, and more.
4) Mutual funds are structured with sponsors, trustees, asset management companies, custodians
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.
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.
This document discusses various investment avenues available in India. It outlines essential features of investments such as safety, liquidity, income, growth, legality and tax implications. Some key investment alternatives mentioned include bank deposits, post office schemes, company fixed deposits, public provident fund, equity shares, bonds, money market instruments, financial derivatives, mutual funds, life insurance and real estate. The document provides brief descriptions of these different investment types.
This document provides an introduction to investment management. It defines investment as committing funds to achieve additional income or growth over time. Investments involve allocating assets, expecting positive returns, and having a long time frame. Investments can range from safe to risky. The objectives of investment include achieving good returns, reducing risk, liquidity, safety of funds, and hedging against inflation. Favorable factors for investment include legal safeguards, a stable currency, financial institutions and services, business organization structures, and choice of investment. The document outlines various investment media including direct, indirect, variable principal, and non-security investments. It also discusses features of an investment program such as safety, liquidity, income stability, and appreciation
This document discusses capital structure and financial markets, specifically the primary market. It defines the primary market as the market for new issuers, where companies can directly issue shares, bonds, or other securities to raise capital. The document outlines the key participants and processes in the primary market in Nepal, including requirements for disclosure, underwriting, and issue procedures that must follow the Company Act and SEBON guidelines. Overall, the primary market provides an important channel for companies and governments to raise funds for investment and growth.
The depository system in India allows investors to hold securities electronically in depository accounts, eliminating the need for physical certificates. Introduced in 1996, depositories like NSDL and CDSL hold securities on behalf of investors through depository participants like banks and brokers. This electronic book-entry system reduces costs and risks compared to physical certificates, allowing faster and more convenient transfer of securities and funds.
Commercial paper (CP) is an unsecured, short-term debt instrument issued by corporations to meet short-term liabilities. CP was introduced in India in 1990 to provide highly rated corporations an alternative to bank borrowing. Only reputable corporations with good credit ratings can issue CPs to borrow at lower interest rates than banks and save on financing costs. CPs can be issued for periods between 15 days to one year, making them suitable for meeting working capital or current asset needs.
The document provides an overview of the Over The Counter Exchange of India (OTCEI). It discusses that OTCEI is an electronic stock exchange comprised of small and medium sized firms looking to gain access to capital markets. Some key points covered include OTCEI's history and establishment in 1990, its features like use of modern technology and all-India network, listing requirements for companies, advantages like access to capital, and disadvantages such as poor initial trading volumes and liquidity.
This document provides an overview of the money market, including its key components, instruments, and structure in India. The money market deals in short-term financial assets that can be easily converted into cash. It includes treasury bills, certificates of deposit, commercial paper, banker's acceptances, and repurchase agreements. The money market helps facilitate short-term borrowing and lending, provides liquidity management for the central bank, and supports business financing needs. The structure of the Indian money market involves both organized and unorganized sectors, with the Reserve Bank of India playing a key regulatory role.
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities. The main benefits are professional management, diversification, liquidity, and low costs. A mutual fund is operated by a sponsor, trustee, asset management company, custodian, and registrar. There are different types of funds categorized by structure (open or closed-ended), investment objectives (growth, debt, balanced), and other factors. Mutual funds provide investors an opportunity to participate in markets and support the economy.
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities. The money earned through investments and any capital appreciation is shared by unit holders proportionate to how many units they own. The document discusses the history of mutual funds in India from 1964 to present. It describes open-ended and closed-ended funds, as well as growth, income, balanced, and money market funds. The advantages of mutual funds include diversification, professional management, convenience, and tax benefits, while the disadvantages include costs and lack of control. Systematic investment plans allow regular investing of small amounts to achieve long-term goals through rupee cost averaging and the power of compounding.
This document provides an overview of mutual funds, including their key concepts, roles, how they operate, types of funds, legal structure in India, and distribution channels. The main points are:
- A mutual fund pools money from investors and invests it in stocks, bonds and other securities, with the fund managed by a professional on behalf of investors.
- Mutual funds assist investors in earning income, provide diversification, and help raise money for governments and companies through investments.
- The legal structure of mutual funds in India involves a trust with sponsors, trustees, an asset management company, custodian and registrar & transfer agent. Key documents include SID, SAI and KIM.
The document discusses stock exchanges and their functions. It defines a stock exchange as an organization established to assist, regulate, and control trading of securities. It describes how stock exchanges host markets where stocks, bonds, and other financial instruments are traded between buyers and sellers during business hours. Exchanges impose rules on member firms and brokers. The key functions of stock exchanges include providing liquidity and marketability for existing securities, determining prices through the forces of supply and demand, ensuring the safety of transactions through compliance with exchange rules and regulations, contributing to economic growth by providing investment opportunities, and spreading information about listed companies.
A stock broker is an individual who works for a brokerage firm and facilitates the buying and selling of stocks, bonds, and other securities between clients and on stock exchanges. There are two main types of stock brokers - full-service brokers, who provide financial advice and recommendations in addition to executing trades, and discount brokers, who only execute trades without providing advice. Stock brokers play an important role in the stock market by acting as intermediaries between buyers and sellers and using their market knowledge to help clients invest strategically for profit.
A mutual fund is an investment tool that pools money from many investors and invests it in stocks, bonds, and other securities. The document summarizes the history and growth of mutual funds in India from 1963 to the present in four phases. It describes the types of mutual funds including by maturity, investment objective, and advantages for investors such as portfolio diversification, professional management, reduced costs and risk, and liquidity.
Investment Securities. alternatives & attributesASAD ALI
This document discusses investment alternatives and their attributes. It describes direct and indirect investing. Direct investing includes non-marketable assets like savings deposits and money market securities like T-bills. Capital market securities include fixed income bonds and equity securities like stocks. Indirect investing is through investment companies like mutual funds. The document also discusses different types of stocks and attributes investors should consider like risk, return, marketability and taxes to evaluate investments.
1. The document discusses the growth and development of derivatives markets in India, including key milestones like SEBI permitting derivatives trading on Indian stock exchanges in 2000 and the introduction of various derivatives products over subsequent years.
2. It provides background on regulations governing derivatives trading in India and the objectives of regulation, including protecting investors and market integrity.
3. The document outlines the objectives of the study, which include understanding the Indian derivatives market scenario, analyzing whether derivatives have achieved their purpose, and suggesting methods based on observations. It discusses the scope and limitations of the study.
The document discusses India's depository system. It begins by outlining problems with physical share certificates like theft, delays, and paperwork. It then summarizes the Depositories Act of 1996 which established depository services in India. Depositories dematerialize physical shares and allow for electronic trading and transfer of shares. Major players in India's depository system are the National Securities Depository Limited and Central Depository Services (India) Limited. Benefits of the depository system include safety, immediate transfers, and reduced costs.
This document provides an overview of mutual funds, including:
1) Mutual funds pool money from investors and invest it in stocks, bonds, and other securities to spread out risk. Profits and losses are shared by investors proportionate to their investment.
2) Mutual funds offer benefits like diversification, professional management, liquidity, and lower costs. They allow small investors access to a wide range of investments.
3) There are different types of mutual fund schemes categorized by their investments, objectives, and other features. Funds invest in stocks, bonds, sectors, indexes, and more.
4) Mutual funds are structured with sponsors, trustees, asset management companies, custodians
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 pool money from investors and invest it in a portfolio of securities like stocks, bonds and money market instruments. The document provides an overview of mutual funds in India including their definition, benefits, types, risks, regulations and more. It discusses the key entities involved like SEBI, sponsors, trustees, asset management companies and more. It also summarizes the various guidelines and regulations around mutual funds as per SEBI.
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 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.
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.
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
The document discusses the role of national distributors in the mutual fund industry, using NJ India Invest Pvt. Ltd. as a case study. It finds that while awareness of mutual funds is growing, many insurance advisors still lack detailed knowledge. National distributors like NJ India are helping to address this through training and seminars. NJ India has an established presence with over 1100 employees and 18,000 partners across India. It provides various support services and aims to educate more investors and advisors on mutual funds. The conclusion is that national distributors are critical to increasing awareness and growing the mutual fund market in India.
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.
Mutual funds allow investors to pool their money together into a portfolio that is professionally managed. The key benefits of mutual funds include diversification of risk, professional management, and reduced transaction costs. A mutual fund is made up of a trust that holds the securities in the fund. The trust is managed by a board of trustees and an asset management company. Regulators like SEBI oversee the mutual fund industry in India and work to protect investors. Distribution channels play an important role in helping mutual funds reach retail investors. Agents and brokers are typically compensated through upfront and trail commissions.
Modern Portfolio Theory (Mpt) - AAII Milwaukeebergsa
This document provides an overview of Modern Portfolio Theory (MPT) including its key concepts and measurements. MPT proposes that rational investors will use diversification to optimize their portfolios based on measures of expected return and risk. It defines risk as the standard deviation of returns and outlines how diversifying uncorrelated assets reduces non-systematic risk. The document then explains common MPT metrics like beta, alpha, the Sharpe Ratio, and R-squared and provides examples of how they are calculated and applied to funds.
1) SIP provides benefits like rupee cost averaging, power of compounding, and avoiding attempts to time the market. Stories are used to illustrate these concepts in simple terms.
2) One story shows how disciplined, regular investing like SIP is better than sporadic efforts to get fit like the character who injured himself.
3) Another story demonstrates how averaging purchase costs over time through SIP can reduce losses from unexpectedly poor performance on one investment.
Systematic Investment Plan (SIP)-Smarter way to meet your financial goalsRR Finance
SIP is an investment program that allows you to contribute a fixed amount (as low as Rs. 1000/-) in mutual funds at regular intervals. Please visit:- http://rrfinance.com/Mutual%20Fund/Mutual_Fund_Home.aspx
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.
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.
Investments are a great way to allow your money to earn for you. However, to yield the best results, you cannot remain completely uninvolved. These can only be achieved with constant monitoring and fine-tuning of investments. For those who have extensive financial investments, the proper management of these investments could mean the difference between success and failure in the markets. While mutual funds are considered safer than traditional investments owing to their diversity, it’s very important to constantly monitor them with the help. In fact, there are professional financial planners for this purpose. This article will explain the benefits of calculating the NAV of your mutual fund investments with a financial planner.
What is SIP? (Systematic Investment Planning) slideshareLatin Manharlal
Systematic Investment Plan (SIP) is an approach to investing small amounts at regular intervals rather than investing lump sum amount at one time.
Considered to be the safest way to invest into Equity Markets by going the SIP route, Investor is not trying to capture the Highs and lows of the market, but trying to average the cost by investing at regular interval.
Concept is that, When the markets fall investor gets more units. Likewise investor acquires lesser units when the market goes up. This means that investor buys less when the price is high and investor buys more when the price is low. Hence the average cost per unit falls down over a period of time.
This document provides an overview of mutual funds in Pakistan. It discusses key topics such as:
- What a mutual fund is and how it pools investments from many investors.
- The various parties involved in mutual funds, including asset management companies, fund managers, trustees, custodians, and the regulator (SECP).
- The different types of mutual funds based on maturity (open-ended and closed-ended) and investment strategies (equity, balanced, income, money market funds).
- A brief history of mutual funds and how they were introduced in Europe, the US, and Pakistan.
- The rules and regulations governing mutual funds in Pakistan set by the SECP.
So
The document provides an overview of the mutual fund industry in India. It discusses the evolution of mutual funds in India from the establishment of Unit Trust of India in 1963 to the present scenario. Key developments include the entry of public sector funds in 1987, private sector funds in 1993, and the bifurcation of UTI in 2003. The document also defines what a mutual fund is, explains the working of mutual funds including the roles of various constituents like sponsors, trustees, asset management companies, custodians and more. It highlights the advantages of mutual funds like diversification, professional management, liquidity, and tax benefits. Finally, it touches upon the risk-return relationship with respect to mutual fund investments.
This document discusses the benefits of systematic investment plans (SIPs) for achieving financial goals like retirement, children's education, and family commitments. SIPs allow investors to invest small monthly amounts that benefit from the power of compounding over the long term. Equity investments through SIPs are ideal for meeting long-term goals since equities have historically offered higher returns than other asset classes. Regular investing through SIPs also reduces market timing risk. The document provides examples of the monthly investments needed through SIPs to achieve common financial goals like retirement and children's education to demonstrate how SIPs can help investors achieve their goals.
Mutual funds allow investors to pool their money together into a portfolio that is professionally managed. The document discusses different types of mutual funds such as equity funds, bond funds, and balanced funds, which invest in a mix of equity and debt. It also discusses the structure of mutual funds in India, which follows a three-tier model consisting of sponsors, trustees, and asset management companies (AMCs). AMCs manage the day-to-day activities of the mutual fund and charge fees. Overall, the document provides an overview of what mutual funds are, how they work, their benefits, and the different parties involved in mutual funds.
This document discusses mutual funds and provides information on their structure and types. It begins with defining a mutual fund as a pool of money collected from investors to invest in securities like stocks and bonds. It then describes the different types of mutual funds based on their investment objectives and structures. The rest of the document outlines the key participants involved in mutual funds like sponsors, trustees, asset management companies, custodians and distributors. It also briefly discusses the history, advantages, and disadvantages of mutual funds.
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities. The money collected is invested in capital market instruments to earn income and capital appreciation, which is then shared by unit holders proportionate to their investment. A mutual fund allows small investors to participate in a diversified portfolio managed by professionals at a low cost. SEBI defines mutual funds as funds established in the form of a trust to raise money through unit sales to the public under various schemes for investing in accordance with regulations.
Mutual funds pool money from investors and invest it in securities like stocks and bonds. They have different investment objectives depending on investors' needs for safety, liquidity or returns. Mutual funds provide benefits like diversification, transparency and liquidity. They are classified by structure, management style, investment universe and other factors. Some types include equity funds, debt funds, hybrid funds, fixed maturity plans and real estate funds. Mutual funds offer systematic investment plans to help investors invest regularly and build wealth over the long run.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Presentation on Introduction to Mutual Funds Investing.pdfAdityaRoy838557
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Presentation on Introduction to Mutual Funds Investing.pdfpoonamshinde64
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a way to diversify their investments and earn returns on their money.
This document provides an overview of mutual funds, including their meaning, operation, advantages, limitations, and types. A mutual fund pools money from investors and invests it in stocks, bonds, and other securities. This allows average investors to participate in financial markets while benefiting from diversification and professional management. The main types of mutual funds are open-ended funds, closed-ended funds, interval funds, actively managed funds, and passively managed funds investing in debt, equity, or hybrid securities.
Presentation on Introduction to Mutual Funds Investing.pptxLakshmipriyanka Asi
This document provides an introduction to mutual funds, including:
- What a mutual fund is, how it works, and its basic structure involving investors, trustees, and an asset management company.
- The various types of mutual funds based on structure (open-ended, closed-ended, interval funds), investment objective (debt, equity, hybrid funds), and investment style (passive, active funds).
- How to invest in mutual funds including through physical/online applications, a registered distributor, and the centralized KYC process.
- The different investment modes like lump sum, SIP, and growth vs. dividend plans.
- Where to find information on specific funds like the Scheme Information Document and Statement
A mutual fund is a pool of money collected from many investors to invest in stocks, bonds, and other securities. An equity fund invests in stocks, a bond fund in debt instruments, and a balanced fund in a mix of both. Mutual funds offer diversification, professional management, affordability for small investors, and liquidity. They also provide transparency through disclosure of holdings and investment patterns. However, risks include costs, dilution of returns, and taxes on capital gains for investors.
This document provides information about mutual funds in India. It discusses the history of mutual funds in India which is divided into four phases from 1964 to the present. It also describes the different types of mutual funds based on structure (open ended, close ended, interval funds), investment objectives (growth, income, balanced, etc.), and others (tax saving, thematic, etc.). The advantages and disadvantages of mutual funds are outlined. Exchange traded funds and asset management companies are also explained. Methods of evaluating mutual fund performance like Sharpe's and Treynor's models are mentioned. Regulations around investment limits for mutual funds are provided.
- 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
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.
This document provides an overview of a study on comparative analysis of mutual funds at HDFC Bank. It includes sections on the project synopsis, introduction to mutual funds, theoretical review of mutual fund types and characteristics, literature review on past studies, statement of the problem being addressed, objectives of the study, research methodology, and planned data collection methods and analysis tools. The study aims to analyze and compare different mutual fund schemes to provide insights for investors.
This document provides an overview of major data mining algorithms, including supervised learning techniques like decision trees, random forests, support vector machines, naive Bayes, and logistic regression. Unsupervised techniques discussed include clustering algorithms like k-means and EM, as well as association rule learning using the Apriori algorithm. Application areas and advantages/disadvantages of each technique are described. Libraries for implementing these algorithms in Python and R are also listed.
These technologies are gradually reshaping the financial services industry:
- Artificial intelligence, deep learning, analytics, blockchain, and robotic process automation are emerging technologies applied in finance.
- Analytics has been a top technology trend for over a decade and is going through four stages from basic business intelligence to real-time streaming analytics.
- Blockchain uses distributed ledger technologies and consensus algorithms to securely record transactions in a decentralized manner, having applications for cryptocurrency, smart contracts, and identity management.
Blockchain is a distributed database that records transactions in blocks that are linked using cryptography. It uses consensus algorithms to ensure participants agree on the state of transactions and uses data structures like linked lists and Merkle trees to organize transactions. Blockchain was designed to maintain a consistent state across distributed systems in the presence of faults or failures.
Hyperloop is a proposed high-speed transportation system that would use reduced pressure tubes and linear induction motors to propel passenger capsules at over 600 mph. Capsules would ride on a cushion of air within the tubes and be accelerated by linear induction motors powered by solar panels. Key advantages include using open source technology, being energy efficient and non-polluting, and employing linear induction motors which have no moving parts and propel the capsules through electromagnetic fields rather than friction.
The document summarizes the key highlights of the Indian government's 2018 budget. It outlines differences between government and business accounting, the major components of government expenditures and receipts, and defines fiscal deficit. It then details several new major expenditure initiatives in areas like agriculture, welfare, education, and healthcare. Other initiatives include infrastructure projects and reforms in taxation, banking, and markets. The analysis suggests the budget aims to boost growth through fiscal expansion and reforms while maintaining a fiscal deficit of 3.5% of GDP. It is expected to increase investment, employment, consumption, and GDP.
The document provides an overview of key changes and definitions in the CGST Act related to Budget 2018. Some important points include:
- Chapter 1 covers introductory provisions including important definitions like casual taxable person, non-resident taxable person, composite supply, mixed supply, exempt supply, non-taxable supply, and goods and services.
- Chapter 2 deals with tax officers and their powers. Important officers include those appointed by the central and state governments.
- Chapter 3 covers levy and collection of tax including the scope and time of supply, tax liability on composite/mixed supplies, the charging section, reverse charge, and the composition scheme.
- Chapter 4 defines the time and value
The document provides information on various health and nutrition topics. It discusses that the human body needs over 100 vitamins and minerals to stay healthy, and balanced portions of protein, grains, and fruits and vegetables are important. Calorie needs vary by individual based on factors like lean mass and activity level. Therapeutic diets are prescribed to address specific health conditions. The body is 60-70% water and it is crucial to drink water daily to replace losses from activities. Exercise benefits include improved cardiovascular health, muscle building, weight loss, and reduced aging. Moderate exercise for 30 minutes daily is recommended. The effects of exercise on the brain include increased neuroplasticity, blood flow, growth of new brain cells, and mood benefits that can
This document discusses nonlinear dynamical systems and modeling techniques. Nonlinear dynamical systems have multiple inputs, feedback loops, and sensitivity to initial conditions. They can be modeled using techniques like state space models, principal component analysis, neural networks, and chaos theory. Modeling nonlinear dynamical systems involves accounting for their emergent behavior from component interactions, distributed nature, and potential to evolve into chaotic states.
GST aims to simplify India's indirect tax system by introducing one indirect tax to replace multiple taxes. It faces challenges in balancing revenue sharing between the central and state governments. The new system introduces IGST to address inter-state transactions. It reduces compliance burdens by providing a single registration and return filing point. However, input tax credit claims are only allowed if matching invoices show the seller paid taxes, which may require contract modifications. Dual empowerment of central and state authorities to audit returns could lead to conflicting assessments.
The document discusses the evolution of the finance function from the 1960s to present and future. It describes how the finance function has transformed from a focus on "creative accounting" and scorekeeping to prioritizing compliance, efficiency, decision support, and becoming a business partner. The future of finance is outlined as providing predictive insights into performance, growth, and risk to help drive business decisions as a true strategic partner. Finance is utilizing new technologies and analytical skills to integrate diverse data sources and provide real-time insights beyond just financial data.
Transfer pricing provisions in India revolve around international transactions between associated enterprises. The key concepts are international transaction, associated enterprise, and arm's length price. Tax authorities require documentation to establish that transfer prices are at arm's length. Non-compliance can result in income adjustments and penalties. Safe harbour rules provide certain transactions predefined arm's length pricing.
This document provides an introduction to risk and discusses key concepts related to predicting and modeling risk. It defines risk as a set of measured uncertainties where some outcomes could result in significant loss. It discusses factors that can increase the risk of a heart attack and challenges in predicting who specifically will have one. The document also introduces concepts like stochastic processes, Markov processes, Monte Carlo simulation, and the random walk hypothesis which are used to model and predict risk. It notes the components that contributed to past financial crises and how simulation methods can be used to analyze risk. The overall objective of risk management is to take care of uncertainty and allow for better planning and more secure outcomes.
Transfer pricing regulations aim to ensure multinational companies pay appropriate taxes based on real economic activity in each country. When tax rates differ between countries where a multinational operates, there is an incentive to shift profits to low tax jurisdictions. To prevent tax losses, many countries have introduced transfer pricing laws governing prices on cross-border transactions between related entities. The arm's length principle requires related party transactions be priced as if they occurred between unrelated parties. Various transfer pricing methods, like comparable uncontrolled price method and cost plus method, can be used to determine the arm's length price applicable to related party deals.
This document discusses various tax issues that arise in mergers and acquisitions under Indian tax law. It covers topics like the meaning of amalgamation, capital gains tax exemptions for amalgamations, treatment of losses and depreciation for the amalgamated company, international tax issues like transfer pricing and thin capitalization. It provides an overview of the key domestic tax provisions around amalgamations, demergers and slump sales. It also gives a brief introduction to concepts of international taxation like offshore financial centers and their implications.
Long Term Capital Management (LTCM) was a hedge fund founded in 1994 by John Meriwether that utilized quantitative models and leverage to profit from convergence trades. While initially successful, LTCM lost billions in 1998 during the Russian financial crisis as markets became volatile and liquidity dried up. To prevent systemic risk, the Federal Reserve orchestrated an emergency bailout. The crisis showed that highly leveraged positions are vulnerable to shifts in market liquidity and correlations between assets. Key lessons include incorporating liquidity as a risk factor, stress testing models, and relying more on judgment than purely quantitative analysis.
Asset liability management (ALM) aims to match assets and liabilities to control sensitivity to interest rate changes and limit losses. Key concepts discussed include liquidity risk, interest rate risk, gap analysis, duration gap analysis, and the role of the ALCO in managing risks. Liquidity and interest rate risks can arise from mismatches between asset and liability cash flows and interest rate sensitivities. ALM techniques assess risks and seek to balance risks from both sides of the balance sheet.
This document provides an overview of global financial markets and their terminology. It discusses how trading occurs both on formal exchanges and over-the-counter markets. Financial exchanges provide price information, counterparty protection, and facilitate trading. OTC markets allow customization but lack exchange protections. Major debt, foreign exchange, and derivatives markets operate via OTC arrangements and inter-dealer brokers.
This document summarizes key provisions around deductions allowed under business and professional income in the Income Tax Act. It discusses sections related to deductible expenses like depreciation, preliminary expenses, scientific research, etc. It also covers inadmissible expenses and special provisions for certain industries. Specific deductions are outlined for tea/coffee development funds, site restoration funds, voluntary retirement schemes, and insurance premiums. The document categorizes the various deduction sections and provides explanations of select concepts like block of assets and mandatory claiming of depreciation.
This document discusses tax planning strategies for salaried individuals, dividing them into salary restructuring and investing in tax-saving devices. For salary restructuring, it recommends structuring salary to include tax-exempt allowances like housing, uniforms, education, etc. It also discusses commuting pension and transferring provident funds. For tax-saving investments, it lists options under sections 80C, 80D, 80E, 80G, etc and explains how to claim deductions and maximize tax savings within the specified limits.
The document discusses various aspects of taxation related to salaries in India such as taxation of retrenchment compensation, provident funds, perquisites, and more.
It summarizes that retrenchment compensation up to Rs. 500,000 is tax exempt. For provident funds, statutory and recognized funds provide various tax exemptions while payments from unrecognized funds are partially taxable. Perquisites are taxable benefits provided in addition to salary, and some like rent-free housing are taxable for all employees while others only for specified employees.
The document also covers topics like voluntary retirement schemes, superannuation funds, health insurance premiums paid by employers, and various tax exemptions for allowances like education, food
More from Vikram Sankhala IIT, IIM, Ex IRS, FRM, Fin.Engr (20)
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
How to Fix the Import Error in the Odoo 17Celine George
An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
How to Add Chatter in the odoo 17 ERP ModuleCeline George
In Odoo, the chatter is like a chat tool that helps you work together on records. You can leave notes and track things, making it easier to talk with your team and partners. Inside chatter, all communication history, activity, and changes will be displayed.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
Thinking of getting a dog? Be aware that breeds like Pit Bulls, Rottweilers, and German Shepherds can be loyal and dangerous. Proper training and socialization are crucial to preventing aggressive behaviors. Ensure safety by understanding their needs and always supervising interactions. Stay safe, and enjoy your furry friends!
MATATAG CURRICULUM: ASSESSING THE READINESS OF ELEM. PUBLIC SCHOOL TEACHERS I...NelTorrente
In this research, it concludes that while the readiness of teachers in Caloocan City to implement the MATATAG Curriculum is generally positive, targeted efforts in professional development, resource distribution, support networks, and comprehensive preparation can address the existing gaps and ensure successful curriculum implementation.
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
3. SEBI Definition of Mutual fund?
• As per SEBI definition, ”A fund established in
the form of a trust by a sponsor,
• to raise money by the trustees thru the sale of
units to the public,
• under one or more schemes ,
• for investing in securities in accordance with
the sebi regulations.”
4. SEBI Definition of Mutual fund?
• In simple words,”a mutual fund collects the
savings from the small investors,
– invest them in Govt or corporate securities and
– earns income
– And distributes earnings to the unit holders”
5. • A Mutual Fund is a trust
– that pools
– the savings of
– a number of investors who share a
– common financial goal.
ConceptConcept
6. • The money thus collected is
• then invested in capital market instruments
• such as shares, debentures and other securities.
ConceptConcept
7. • 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.
ConceptConcept
8. • 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.
ConceptConcept
9. What is the structural arrangement of an average
mutual fund?
• The mutual fund industry and all participants
involved in this business are governed by SEBI.
10. What is the structural arrangement of an average
mutual fund?
• The promoters or sponsors
• appoints trustees
• and set up and AMC which in turn
• appoints a custodian/depository, registrars,
transfer agents and auditors.
11. • The trustees play a critical role
• as they hold in trust the investments of the
investors/unit holders of the mutual fund.
12. • The board of trustees does not manage the
day to day activities of the mutual fund
directly.
• Instead it appoints an Asset Management
Company (AMC) to perform that task.
13. • Thus the AMC manages the mutual fund
scheme, while the trustees manage them.
14. Custodian
• A custodian holds the securities of various
schemes of the fund in their custody.
• However, following demat, the term
custodian has given way to the ‘Depository’.
15. Registrar
• The registrar is appointed in order to
• accept and process the shareholder’s applications
and
• inform the AMC about the amount received for
subscription, redemption and so forth.
16. Transfer Agents
• Transfer agents are responsible for issuing and
redeeming units of the scheme .
• They are the conduits through which
• fresh units are issued to new buyers
• or units sent back to the AMC for redemption.
17. • The trustees appoint the top management of
the AMC such as Chief Investment Officer or
Chief Executive Officer.
• The trust company also appoints an auditor to
audit the books of accounts of all schemes.
18. SEBI (mutual fund) Regulation,1996
Structure of MF in India
Organizational Structure of MFOrganizational Structure of MF
19. How does the IPO of a mutual fund differ from the IPO
of a company
• Until the middle of 2005, AMCs announced an
IPO every time they launched a new scheme.
• AMFI and SEBI instructed the AMCs to use the
term – NFO (New Fund offer) instead of IPO
for their schemes.
20. Difference
• IPO - can be priced at a premium while an
NFO is issued at par.
• In case of oversubscription, the AMC retains
the entire amount, while in an IPO the
amount needs to be returned unless there is a
green shoe option.
• The fund starts trading at the NAV (Net Asset
Value).
21. • The NAV is largely governed by the value of
the underlying securities into which the fund
has invested and is therefore far less volatile.
22. Annual Recurring Expenses
• The annual recurring expenses include
– trustee fees,
– custodian fees,
– registrar fees
– and other recurring operating expenses.
• These are normally expressed as a percentage of the
net assets and is known as the expense ratio.
23. Annual Recurring Expenses
• The AMC passes these annual recurring expenses or
fund management fees
• to the Investors as entry or exit loads.
24. Entry Load
• Entry Load or front end charge is applied
when an investor buys units of a scheme.
• Thus if the entry load is 2%,
• then the AMC deducts 2% of the total fund
mobilized straight away and
• invests the balance 98% of the corpus to
create the investor portfolio.
25. Exit Load or Back end Load
• Exit Load or Back end Load is levied when an
investor exits the scheme (i.e sells the Units).
• For example, if the exit load is 2% and the
NAV of the scheme is Rs 20, the 40 paise will
be deducted as exit load and Rs 19.60 will be
received when the Units are sold.
26. Exit Load or Back end Load
• A scheme may also be a no load scheme, if the
AMC chooses not to levy any load on the
scheme.
27. • Incorporated on 22 August, 1995.
• Apex body of all the registered AMCs.
• All AMCs are its member.
• Objective to maintain high ethical and professional
standard.
• Provide certificate to Agents to sell MF
• Best practice guidelines.
• Code of ethics.
Role of AMFIRole of AMFI
28. Facts about Mutual Funds
1. The biggest advantage of Mutual Funds is their ability
to diversify the risk.
2. Mutual Funds are their in India since 1964. Mutual
Funds market is very evolved in U.S.A and is there for
the last 60 years.
3. Mutual Funds are the best solution for people who
want to manage risks and get good returns.
29. Mutual Funds
An equity fund would buy equity assets –
ordinary shares, preference shares, warrants
etc.
A bond fund would buy debt instruments such
as debenture bonds, or government
securities/money market securities.
A balanced fund will have a mix of equity
assets and debt instruments.
Mutual Fund shareholder or a unit holder is a
part owner of the fund’s asset.
31. Advantages of Mutual Funds
• Portfolio diversification: It enables him to hold a diversified investment
portfolio even with a small amount of investment like Rs. 2000/-.
• Professional management: The investment management skills, along with the
needed research into available investment options, ensure a much better return
as compared to what an investor can manage on his own.
• Reduction/Diversification of Risks: The potential losses are also shared with
other investors.
• Reduction of transaction costs: The investor has the benefit of economies of
scale; the funds pay lesser costs because of larger volumes and it is passed on to
the investors.
• Wide Choice to suit risk-return profile: Investors can chose the fund based on
their risk tolerance and expected returns.
32. Advantages of Mutual Funds
• Liquidity: Investors may be unable to sell shares directly, easily and quickly.
When they invest in mutual funds, they can cash their investment any time by
selling the units to the fund if it is open-ended and get the intrinsic value.
Investors can sell the units in the market if it is closed-ended fund.
• Convenience and Flexibility: Investors can easily transfer their holdings from
one scheme to other, get updated market information and so on. Funds also
offer additional benefits like regular investment and regular withdrawal options.
•Transparency: Fund gives regular information to its investors on the value of
the investments in addition to disclosure of portfolio held by their scheme, the
proportion invested in each class of assets and the fund manager's investment
strategy and outlook
33. Disadvantages of Mutual Funds
• No control over costs: The investor pays investment management fees
as long as he remains with the fund, even while the value of his
investments are declining. He also pays for funds distribution charges
which he would not incur in direct investments.
• No tailor-made portfolios: The very high net-worth individuals or large
corporate investors may find this to be a constraint as they will not be
able to build their own portfolio of shares, bonds and other securities.
• Managing a portfolio of funds: Availability of a large number of funds
can actually mean too much choice for the investor. So, he may again
need advice on how to select a fund to achieve his objectives.
• Delay in redemption: It takes 3-6 days for redemption of the units and
the money to flow back into the investor’s account.
35. Schemes according to Maturity Period
• A mutual fund scheme can be classified into
– open-ended scheme or
– close-ended scheme
• depending on its maturity period.
36. Open-ended Fund/ Scheme
• available for subscription and repurchase on a
continuous basis.
• does not have a fixed maturity period.
• Investors can conveniently buy and sell units at Net
Asset Value (NAV) related prices which are declared
on a daily basis.
• The key feature of open-end schemes is liquidity.
37. Close-ended Fund/ Scheme
• Stipulated maturity period e.g. 5-7 years.
• Open for subscription only during a specified
period at the time of launch of the scheme.
• Investors can invest in the scheme at the time
of the initial public issue and thereafter they
can buy or sell the units of the scheme on the
stock exchanges where the units are listed.
38. • In order to provide an exit route to the investors,
some close-ended funds give an option of selling
back the units to the mutual fund through periodic
repurchase at NAV related prices.
• SEBI Regulations stipulate that at least one of the
two exit routes is provided to the investor i.e. either
repurchase facility or through listing on stock
exchanges.
• These mutual funds schemes disclose NAV generally
on weekly basis.
39. Schemes according to Investment Objective:
• Growth scheme, income scheme, or balanced
scheme considering its investment objective.
• Such schemes may be open-ended or close-
ended schemes.
• May be classified mainly as follows:
40. Growth / Equity Oriented Scheme
• The aim of growth funds is to provide capital appreciation
over the medium to long- term.
• Such schemes normally invest a major part of their corpus in
equities.
• Such funds have comparatively high risks.
• Growth schemes are good for investors having a long-term
outlook seeking appreciation over a period of time.
41. Income / Debt Oriented Scheme
• The aim of income funds is to provide regular and
steady income to investors.
• Such schemes generally invest in fixed income
securities such as bonds, corporate debentures,
Government securities and money market
instruments.
• Such funds are less risky compared to equity
schemes.
• These funds are not affected because of fluctuations
in equity markets.
42. Balanced Fund
• The aim of balanced funds is to provide both growth and
regular income as such schemes invest both in equities and
fixed income securities in the proportion indicated in their
offer documents.
• These are appropriate for investors looking for moderate
growth.
• They generally invest 40-60% in equity and debt instruments.
• These funds are also affected because of fluctuations in share
prices in the stock markets.
• However, NAVs of such funds are likely to be less volatile
compared to pure equity funds.
43. Money Market or Liquid Fund
• These funds are also income funds and their aim is to provide
easy liquidity, preservation of capital and moderate income.
• These schemes invest exclusively in safer short-term
instruments such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money, government
securities, etc.
• Returns on these schemes fluctuate much less compared to
other funds.
• These funds are appropriate for corporate and individual
investors as a means to park their surplus funds for short
periods.
44. Gilt Fund
• These funds invest exclusively in government
securities.
• Government securities have no default risk.
• NAVs of these schemes also fluctuate due to
change in interest rates and other economic
factors as is the case with income or debt
oriented schemes.
45. Index Funds
• Index Funds replicate the portfolio of a particular
index such as the BSE Sensitive index, S&P NSE 50
index (Nifty), etc
• These schemes invest in the securities in the same
weightage comprising of an index.
• NAVs of such schemes would rise or fall in
accordance with the rise or fall in the index, though
not exactly by the same percentage due to some
factors known as "tracking error" in technical terms.
46. What is a Fund of Funds (FoF) scheme?
• A scheme that invests primarily in other
schemes of the same mutual fund or other
mutual funds is known as a FoF scheme.
• An FoF scheme enables the investors to
achieve greater diversification through one
scheme.
• It spreads risks across a greater universe.
47. What is a sales or repurchase/redemption
price?
• The price or NAV a unitholder is charged while
investing in an open-ended scheme is called
sales price. It may include sales load, if
applicable.
• Repurchase or redemption price is the price or
NAV at which an open-ended scheme
purchases or redeems its units from the
unitholders. It may include exit load, if
applicable.
48. How to invest in a scheme of a mutual fund?
• Mutual funds normally come out with an advertisement in
newspapers publishing the date of launch of the new
schemes.
• Investors can also contact the agents and distributors of
mutual funds who are spread all over the country for
necessary information and application forms.
• Forms can be deposited with mutual funds through the
agents and distributors who provide such services.
• Now a days, the post offices and banks also distribute the
units of mutual funds.
49. What is the procedure for registering a mutual fund
with SEBI ?
• An applicant proposing to sponsor a mutual fund in India
must submit an application in Form A along with a fee of
Rs.25,000.
50. What is the procedure for registering a mutual fund
with SEBI ?
• The application is examined and
• once the sponsor satisfies certain conditions such as being in
the financial services business and possessing positive net
worth for the last five years,
• having net profit in three out of the last five years
• and possessing the general reputation of fairness and
integrity in all business transactions,
• it is required to complete the remaining formalities for setting
up a mutual fund.
51. • These include inter alia,
– executing the trust deed and investment management agreement,
– setting up a trustee company/board of trustees comprising two- thirds
independent trustees,
– incorporating the asset management company (AMC),
– contributing to at least 40% of the net worth of the AMC and
appointing a custodian.
– Upon satisfying these conditions, the registration certificate is issued
subject to the payment of registration fees of Rs.25.00 lacs
• Details are in the SEBI (Mutual Funds) Regulations, 1996.
53. Distribution Channels
Mutual Funds are primary vehicles for large collective investments, working on
the principle of pooling funds.
A substantial portion of the investments happen at the retail level.
Agents and distributors are a vital link between the mutual funds and investors.
54. Distribution Channels
Agents
- Is a broker between the fund and the investor and acts on behalf of the
principal.
- He is not exclusive to the fund and also sells other financial services. This in a
way helps him to act as a financial advisor.
55. Distribution Channels
Distribution Companies
- Is a company which sells mutual funds on behalf of the fund.
- It has several employees or sub-broker under it.
- It manages distribution for several funds and receives commission for its
services.
56. Distribution Channels
Banks and NBFCs
- Several banks, particularly private and foreign
banks are involved in a fund distribution by
providing similar services like that of distribution
companies.
- They work on commission basis.
57. Distribution Channels
Direct Marketing
- Mutual funds sell their own products through
their sales officers and employees of the AMC.
- This channel is normally used to mobilise funds
from high net worth individuals and institutional
investors.
59. Accounting
Calculating Net Asset Value
NAV = (Market value of investments +
Receivables + Other Accrued Income + Other
assets – Accrued Expenses – Other Payables –
Other liabilities) / ( No. of Units Outstanding as at
the NAV date)
60. Accounting
SEBI regulations for NAV
• The day on which NAV is calculated by a fund is
called valuation date.
• NAV of all schemes must be calculated and
published at least weekly.
• This is applicable to both open-end and closed-
end fund.
61. Accounting
Since investments held by a mutual fund in its
portfolio are to be marked to the market, the
NAV includes two components:
a) Realized gains or losses.
b) Unrealized gains or losses.
As per SEBI guidelines, unrealized appreciation
cannot be distributed by a fund, whereas the
realized gain can be distributed.
62. Taxation
Taxation in the Hands of the Fund
Income earned by any mutual fund registered with SEBI or set up by a public
sector bank/Financial Institution or authorized by RBI is exempt from tax.
Income distributed to unit holders by a closed-end or debt fund has to pay a
distribution tax of 10% plus surcharge of 1% I.e. a tax of 11%.
This tax is also applicable to distributions made by open-end funds which
have less than 50% allocation to equity.
63. Taxation
The Impact on the Fund and the Investor
Due to the tax payment by the fund, the NAV and the value of the investor’s
investment will come down.
The tax bears no relationship to the investor’s tax bracket.
This tax makes the income schemes less attractive than growth schemes.
The fund cannot avoid tax even if the investor chooses to reinvest the
distribution back into the fund.
64. What tax benefits are available to those who
invest in mutual funds?
• Dividends declared by debt-oriented mutual
funds (i.e. mutual funds with less than 65% of
assets in equities), are tax-free in the hands of
the investor.
• However, a dividend distribution tax (which
varies for individual and corporate investors)
is to be paid by the mutual fund on the
dividends declared.
65. • Dividends declared by equity-oriented funds (i.e.
mutual funds with more than 65% of assets in
equities) are tax-free in the hands of investor.
• There is also no dividend distribution tax applicable
on these funds.
• Diversified equity funds, sector funds, balanced
funds (with more than 65% of net assets in equities)
are examples of equity-oriented funds.
66. Taxation
Taxation in the Hands of the Investor
Dividend Tax : The tax paid by the investor on receiving dividends from a mutual
fund. There is no dividend tax to be paid at the investor’s end.
There is no dividend distribution tax deduction from NAV in all funds which are
open-end and with over 50% allocation of investment to equities.
Tax of 10.2% is deducted from the NAV by the fund in the following cases:
- All closed end funds including equity.
- All open end funds with less than 50% allocation in equity.
67. Taxation
Taxation in the Hands of the Investor
Capital Gains on Sale of Units: Capital Gains tax is charged when something is sold
at profit. If the investor sells his units and earns “Capital Gains”, the investor is
subject to the Capital Gains Tax.
If the units are held for less than 12 months, they will be treated as short term
capital gain. Otherwise they are called long term capital gains.
For short term, capital gains = Sale consideration – (Cost of Acquisition + Cost of
Improvements + Cost of Transfer)
The tax charged depends on the income bracket of the investor.
For long term capital gains, the investor gets the benefit of ‘Indexation’ by which
his purchase price is marked up by an inflation index.
Cost of acquisition or improvement = actual cost of acquisition or improvement *
cost of inflation index for year of transfer/cost of inflation index for year of
acquisition or improvement.
68. Long Term Capital Gains
• As per section 10(38), Long-term capital gains
arising on transfer of equity shares
or
• units of equity oriented mutual fund is not
chargeable to tax from the
assessment year 2005-06 if such a transaction
is covered by securities transaction
tax.
69. Long Term Capital Gains
• In case of other shares and securities, person
has an option to either index costs to inflation
and pay 20% of indexed gains, or pay 10% of
non indexed gains.
• The indexation rates are released by the I-T
department each year.
70. • In case of all other long term capital gains,
indexation benefit is available and tax rate is
20%.
71. Short term capital gains
• Under section 111A, for shares or mutual
funds where STT is paid, For Asst Yr 2009-10
the tax rate is 15%.
• In all other cases, it is part of gross total
income and normal tax rate is applicable.
73. Why Measure Fund
Performance
The Investor Perspective
-To make intelligent decisions on whether he should continue with the
investment or not.
- He needs the basic knowledge of fund evaluation to judge the performance of
the fund.
74. Why Measure Fund
Performance
The Advisor’s Perspective
-The potential investors would expect the advisor to give them a proper advise
on which funds have good performance.
- In order to compare different funds, the advisor must have the correct
knowledge and appropriate measures of evaluating the fund performance.
75. Different Performance Measures
Change in NAV
-most commonly used by investors to evaluate fund performance and most
commonly published by fund managers.
-NAV Change in absolute terms:
(NAV at the end of period) – (NAV at the beginning of period)
NAV Change in percentage terms:
(Absolute change in NAV/NAV at the beginning of period) * 100
Annualised NAV Change:
{[(Absolute Change in NAV/NAV at the beginning)/months covered]*12}*100
76. Different Performance
Measures
No, percentage NAV change cannot give a correct picture as it does not take
into account the interim dividends paid. The correct measure here is Total
Return Method.
Total Return Method
- It takes into account the dividends paid in the interim period and is suitable for
all types of funds.
- It must be interpreted in the light of market conditions and investment
objective of the fund.
- Its limitation is that it ignores the fact that distributed dividends also get
reinvested if received during the year.
Total Return is:
[(Distributions + Change in NAV)/NAV at the beginning of the period]* 100
77. Expense Ratio
The Expense Ratio
- Indicator of fund’s efficiency and cost effectiveness.
- It is defined as the ratio of total expenses to average net assets of the fund.
-If a fund’s income levels or returns are small say a debt fund with 10% return,
expense ratio becomes important and difference of even 0.5% between two
funds can make lot of difference.
78. Income Ratio
The Income Ratio
- Defined as its net investment income divided by its net assets for the period.
-
- Cannot be used in isolation, but only with expense ratio and total return.
79. Benchmarking
Importance of Benchmarking
- A funds performance can be judged in relation to investor’s expectations.
- However, it is important for the investor to define his expectations in relation
to certain “guideposts”.
- These guideposts or indicators of performance can be thought of as
benchmarks against which a fund’s performance ought to be measured.
- For instance, BSE-30 will be a benchmark for diversified equity fund and BSE IT
index for tech funds.
While an advisor needs to look at the absolute measures of performance, he
needs to select the right benchmark to evaluate a fund’s performance, so that
he can compare the measured performance figures against the selected
benchmark.
80. Benchmarking
Basis for choosing an Appropriate Performance Benchmark
The appropriate benchmark has to be selected by reference to:
1. The Asset Class it invests in. Thus, an equity fund has to be judged by from
an appropriate benchmark from the equity market and so on.
2. The fund’s stated Investment Objective.
There are three types of benchmarks that can be used to evaluate a fund’s
performance:
1. Relative to the market as a whole.
2. Relative to other mutual funds.
3. Relative to other comparable financial products or investments options
open to the investor.
81. Benchmarking relative to other
Financial Products
An investor will compare the mutual fund performance with other
-investment products like bank deposits, NSC’s Indira Vikas Patra etc.
Only instruments of similar investment characteristics and with returns and
calculated over the same periods should be used for meaningful comparisons.
82. Why Invest in Mutual Funds?
• Liquidity
• Minimal transaction costs
• Convenience
• Instant diversification
• Level the playing field
between professional and
individual investors
• Share administrative
expenses
84. The Costs of Mutual Funds
• Load funds -- sales commissions charged to the investor
when purchasing fund shares
• Management fees and expenses -- fees associated
with the operation of the company
• fees -- fees charged to cover the fund’s cost of
advertisement and marketing
86. Buying a Mutual Fund
• Step 1: Determine your risk
preferences
• Step 2: Determine your asset
allocation
• Step 3: Identify family of funds
that meet your objectives
• Step 4: Evaluate the funds.
87. Steps 1 & 2: Determine Your Risk Preferences
and Asset Allocation
• Determine your time horizon and risk
tolerance
• Determine your asset allocation preferences
88. Step 3: Identify Funds That Meet Your
Objectives
• Look to third-party publications
– Look for no-load, open-end, low-fee funds
– Find a family of funds to manage your asset
allocation
89. Step 4: Evaluate the Fund
• Read the prospectus!!!
• Compare returns, risk, turnover, and costs of
funds with the same objective
• Evaluate the fund’s long-term performance
• Look at returns in both up and down markets
90. Questions for Revision
• What is a Mutual Fund? Describe the organizational
structure of a mutual fund?
• Write short Notes on the following:
– Entry Load
– Exit Load
– Closed Ended Fund
– Open Ended Funded
• What are the advantages of investing in Mutual
Funds