The document discusses various types of funds available to investors in Pakistan, including:
- Equity schemes that invest in stocks for capital appreciation and dividend income. Examples include ABL Stock Fund.
- Balanced schemes that invest in both stocks and debt instruments for balanced growth and income. Examples include Meezan Balanced Fund.
- Asset allocation funds that diversify across multiple security types and investment styles. Examples include Askari Asset Allocation Fund.
- Fund of funds that invest in a portfolio of other mutual funds for diversification. Examples include Meezan Financial Planning Fund of Funds.
- Shariah compliant schemes that invest in Shariah approved securities like sukuk. These can be equity
The document discusses investment trusts and mutual funds. It provides information on the history and introduction of the National Investment Trust (NIT) in Pakistan, including its objectives to provide regular income and capital appreciation to unit holders. It describes NIT's portfolio, returns, restructuring program to modernize practices, and its mission to be a resourceful investment strategy for shareholders. NIT has over 62,000 unit holders and aims to maximize returns through investments in approximately 600 listed Pakistani companies.
The model presents key factors that individual investors consider when investing in private equity funds. The factors include returns and risk, entry and exit norms, past experience, legal framework, company management, financial condition of the company, economic factors, growth rate, nature of investment, and other unspecified factors. The model was developed based on analysis of 165 companies to determine the most important criteria for private equity investment decisions by both individual investors and fund managers.
Mutual funds in singapore vis à-vis indiaSurbhi Soni
- Mutual funds are investment vehicles that pool money from many investors to invest in securities like stocks, bonds, and money market instruments. They allow individual investors access to a professionally managed, diversified portfolio.
- Some key benefits of investing in mutual funds include easy investment with professional management, flexibility, risk reduction through diversification, liquidity, and low maintenance requirements for investors.
- While Singapore and India both have regulatory authorities overseeing their mutual fund markets, Singapore's market is more developed with over $70 billion in assets under management compared to around $150 billion in India. Recent regulatory changes in both countries aim to increase investor protection and disclosure requirements for mutual funds.
This document discusses a descriptive study of mutual funds and investors' perceptions about investing in mutual funds. It provides an overview of the mutual fund industry and how mutual funds work. It discusses the different types of mutual funds and risks associated with them. The objectives and timeline of the study are outlined. Research methodology, sample design, data analysis and findings are presented. Limitations and scope for further study are also discussed along with recommendations. A sample questionnaire used for the study is included.
Study is all about finding the factor which affects the private equity investment in india and prefer sector for it along with the process of investment
Investor expectation and perception towards mutual funds by. karan gujratiKaran Gujrati
This document appears to be a summer training project report submitted by Karan Gujrati to the Shambhunath Institute of Management in Allahabad. The report covers:
1. An overview of the Indian stock market's origins from the 18th century trading of East India Company shares up to the present day system of regulated stock exchanges.
2. Details of the National Stock Exchange and Bombay Stock Exchange as the two main stock exchanges in India today.
3. A company profile of SHCIL (Stock Holding Corporation of India Ltd.) where the author completed their summer training.
4. The report goes on to discuss investment avenues, competitors of SHCIL, the author
The document discusses Anand Rathi Private Wealth Management's transition to a new internet-based platform with various applications to improve customer experience. It launched new applications that allow customers to track markets, trade online, and invest in IPOs from anywhere with low bandwidth. This revamped the firm's trading activities and provided benefits to both customers and employees. The new platform aims to give customers a more user-friendly environment and eliminate time lags that delayed transactions previously.
This document provides an overview of NAFA Mutual Funds. It discusses that NAFA is a non-banking finance company licensed for asset management and advisory services. It manages 11 open-ended mutual funds and 2 pension funds, with categories including money market, income, asset allocation, balanced, equity and Shariah-compliant funds. The document outlines the investment objectives and strategies of various NAFA funds and pension plans. It also describes the benefits of investing in NAFA such as diversification, potential high returns, and tax incentives. However, it notes weaknesses such as limited retail penetration and concentration of investors.
The document discusses investment trusts and mutual funds. It provides information on the history and introduction of the National Investment Trust (NIT) in Pakistan, including its objectives to provide regular income and capital appreciation to unit holders. It describes NIT's portfolio, returns, restructuring program to modernize practices, and its mission to be a resourceful investment strategy for shareholders. NIT has over 62,000 unit holders and aims to maximize returns through investments in approximately 600 listed Pakistani companies.
The model presents key factors that individual investors consider when investing in private equity funds. The factors include returns and risk, entry and exit norms, past experience, legal framework, company management, financial condition of the company, economic factors, growth rate, nature of investment, and other unspecified factors. The model was developed based on analysis of 165 companies to determine the most important criteria for private equity investment decisions by both individual investors and fund managers.
Mutual funds in singapore vis à-vis indiaSurbhi Soni
- Mutual funds are investment vehicles that pool money from many investors to invest in securities like stocks, bonds, and money market instruments. They allow individual investors access to a professionally managed, diversified portfolio.
- Some key benefits of investing in mutual funds include easy investment with professional management, flexibility, risk reduction through diversification, liquidity, and low maintenance requirements for investors.
- While Singapore and India both have regulatory authorities overseeing their mutual fund markets, Singapore's market is more developed with over $70 billion in assets under management compared to around $150 billion in India. Recent regulatory changes in both countries aim to increase investor protection and disclosure requirements for mutual funds.
This document discusses a descriptive study of mutual funds and investors' perceptions about investing in mutual funds. It provides an overview of the mutual fund industry and how mutual funds work. It discusses the different types of mutual funds and risks associated with them. The objectives and timeline of the study are outlined. Research methodology, sample design, data analysis and findings are presented. Limitations and scope for further study are also discussed along with recommendations. A sample questionnaire used for the study is included.
Study is all about finding the factor which affects the private equity investment in india and prefer sector for it along with the process of investment
Investor expectation and perception towards mutual funds by. karan gujratiKaran Gujrati
This document appears to be a summer training project report submitted by Karan Gujrati to the Shambhunath Institute of Management in Allahabad. The report covers:
1. An overview of the Indian stock market's origins from the 18th century trading of East India Company shares up to the present day system of regulated stock exchanges.
2. Details of the National Stock Exchange and Bombay Stock Exchange as the two main stock exchanges in India today.
3. A company profile of SHCIL (Stock Holding Corporation of India Ltd.) where the author completed their summer training.
4. The report goes on to discuss investment avenues, competitors of SHCIL, the author
The document discusses Anand Rathi Private Wealth Management's transition to a new internet-based platform with various applications to improve customer experience. It launched new applications that allow customers to track markets, trade online, and invest in IPOs from anywhere with low bandwidth. This revamped the firm's trading activities and provided benefits to both customers and employees. The new platform aims to give customers a more user-friendly environment and eliminate time lags that delayed transactions previously.
This document provides an overview of NAFA Mutual Funds. It discusses that NAFA is a non-banking finance company licensed for asset management and advisory services. It manages 11 open-ended mutual funds and 2 pension funds, with categories including money market, income, asset allocation, balanced, equity and Shariah-compliant funds. The document outlines the investment objectives and strategies of various NAFA funds and pension plans. It also describes the benefits of investing in NAFA such as diversification, potential high returns, and tax incentives. However, it notes weaknesses such as limited retail penetration and concentration of investors.
This document provides an overview of Swastika Investmart Ltd., a stock broking and financial services company based in India. It details the company's vision, mission, leadership team, services offered including stock broking, derivatives, commodities, currency, and depository services. The summary highlights the company's growth over time in obtaining memberships in various exchanges and expanding its service offerings and client base to become a leading financial services provider in India with over 250 employees and 30 branches nationwide.
The document discusses Religare Securities Limited, an Indian equity and securities firm, and provides details about its operations, locations, partnerships, and offerings. It also defines what a mutual fund is as a pool of money collected from investors to invest according to predefined objectives, and lists some characteristics and advantages of mutual funds. Religare is aiming to build itself as a globally trusted brand in financial services and be the "Investment Gateway of India" through its retail, institutional, and wealth management services.
This project report summarizes the working and trading procedures of the Indian stock market with reference to Anand Rathi, a leading Indian brokerage company. It provides an overview of Anand Rathi, including that it was founded in 1994 and offers various financial products and services. It also describes key aspects of the stock market like the primary and secondary markets, stock exchanges in India, SEBI, opening a demat account, online and offline trading, derivatives, commodities, mutual funds, insurance, and portfolio management.
National Investment Trust (NIUT) is Pakistan's largest and oldest mutual fund, with a portfolio valued at approximately Rs. 63 billion invested in around 389 listed Pakistani companies. NIUT has over 48,847 unit holders and invests primarily in equities that correlate highly with the Karachi Stock Exchange 100 index. The fund offers investors professional management, diversification, and convenience.
This document discusses security analysis and portfolio management for a Master's degree project. It includes a title page, declaration by the student, preface, acknowledgements, table of contents, and executive summary. The project focuses on analyzing securities and managing portfolios for IIFL, an Indian financial services company, under the guidance of a professor.
Introducing social responsible investment sri sukuk in malaysian market (1)Quastan Alias
The document discusses introducing Social Responsible Investment (SRI) Sukuk funds in the Malaysian market. It aims to examine the need for introducing SRI Sukuk, identify the benefits of SRI Sukuk, and suggest important aspects to include in the SRI Sukuk framework. The introduction of SRI funds could help keep Malaysia up to date with global financial trends and satisfy increasing demand for Shariah-compliant funds. Potential benefits include SRI Sukuk having convincing characteristics for Muslim investors and serving as a platform to encourage and assist national development projects.
This document provides a comparative analysis of mutual fund schemes. It discusses types of mutual funds according to maturity period and investment objective. The facilities provided by mutual funds to investors are also outlined. The document analyzes the performance of various mutual fund schemes of different companies using metrics like beta, alpha, and standard deviation. Key findings are that ICICI PRU and Franklin Templeton funds have strong stock picking styles and risk management. Reliance funds can provide high returns but are not suitable for conservative investors. HDFC funds provide stability through large cap exposure. In conclusion, mutual funds provide a good investment option for committed, long term investors.
SAPM - Portfolio Construction and Comparison for Securities on BSEBishnu Kumar
This document presents a study on portfolio construction and comparison of securities listed on the Bombay Stock Exchange (BSE). It begins with an introduction to modern portfolio theory and the single index model. It then discusses factors that impact company performance such as economic, industry and company-specific analyses. The document outlines the study's objectives, methodology and data analysis approach. It describes calculating beta and constructing optimal portfolios using the Sharpe single index model. The document compares the resulting portfolios and provides observations. Tables with portfolio construction worksheets are also included.
The document provides an overview of JS Investments Limited (JSIL), one of the largest private asset management companies in Pakistan. It discusses JSIL's history, vision, mission, objectives, products and services which include various mutual funds. It also summarizes JSIL's major investors and some of its key investments in industries such as sugar, fertilizers and transportation. Performance metrics for different asset classes are presented along with JSIL's future outlook. Major investors in JSIL include companies, financial institutions, insurance firms and individuals both locally and internationally.
The document discusses the results of a study on investment preferences among 100 investors in Surat, India. It finds that most investors are aware of traditional investment avenues like bank deposits, mutual funds, gold/silver, and real estate. Moderate risk investment avenues like mutual funds are generally preferred. When choosing investments, safety and surety of returns are key factors. The study recommends that investors allocate funds to real estate, gold/silver and mutual funds to achieve higher returns with capital safety.
Sokouk Al-Intifa'a is an Islamic financial instrument that represents ownership in the usufruct (right of use) of an asset such as real estate. It allows investors to purchase shares in the cash flows generated by leasing the asset. Sokouk Al-Intifa'a can be used to raise funds for large projects by securitizing revenue streams from leases. As the document explains, it has potential benefits for real estate development, hospitality industries, and as a tradable instrument on money markets. The presentation concludes by advocating for the continued development of Sokouk Al-Intifa'a and other Islamic financial instruments to meet the needs of investors and expand opportunities.
The Rajasthan Venture Capital Fund was established in 2002-2003 and is based in Jaipur, India. It is focused on providing financial and managerial support to small and medium enterprises operating in various sectors like IT, biotechnology, retail, agriculture, and healthcare. The fund currently has an active investment portfolio of 8 companies based in Rajasthan and the National Capital Region. Its objective is to support the growth of investee companies through equity investments, strategic guidance, and network connections. Individual investments typically range from 10 to 200 million rupees. The preferred exit route for investments is an IPO within 3 to 5 years.
Performance evaluation of mutual funds @ uti securetiesBabasab Patil
The document provides an overview of a study on evaluating the performance of mutual funds with reference to risk and return. The study was conducted at UTI Securities Ltd and analyzed equity diversified open-ended mutual fund schemes. The objectives of the study were to evaluate the returns and associated risks of mutual funds from different companies and evaluate investment performance using risk-adjusted measures. The document discusses the methodology, which involved collecting secondary data from reports by UTI Securities and other websites. It also provides context on mutual funds and classifications of mutual fund schemes.
Venture capital in India is a big action by the Indian government in the term of industry development. Venture capital having more problem and also denoted what will be scenario of Venture capital in future !!
Mutual funds have grown significantly globally over the past two decades. Total global mutual fund assets have increased over sevenfold from $4 trillion in 1993 to $28.9 trillion in 2013. The US mutual fund industry has grown to $14.3 trillion, while Europe grew to $9 trillion and Asia-Pacific grew to $3.3 trillion. Many countries outside Europe and the US have seen particularly sharp growth in their mutual fund industries in recent years.
The document lists potential topics related to finance, HR, and marketing. Under finance, topics include currency derivatives, mutual funds, online trading, assets management, share markets, dematerialized accounts, IPOs, and securities analysis. HR topics cover areas like recruitment, training, performance management, and retention. Marketing topics range from customer relationship management and satisfaction to distribution channels, branding, and dealer perception.
The Investment Corporation of Pakistan (ICP) was established in 1966 through an ordinance to develop Pakistan's capital market during a period when investors lost confidence. It was authorized with Rs. 200 million in capital to promote industrial development through activities like underwriting securities, developing mutual funds, and providing long-term loans. While it aimed to stabilize the stock market and spur economic growth, its investment portfolio grew to Rs. 2.18 billion in value by providing capital gains and dividends, with its largest investments in oil/gas and government securities.
Real estate mutual funds (REMFs) allow investors to invest in real estate projects without directly owning property. Some key REMFs in India include funds by HDFC, Kotak Mahindra, and ICICI. REMFs provide diversification compared to single property ownership and professional management. However, they also come with fees and the real estate sector in India has issues with liquidity and price inefficiencies. Overall, REMFs provide an alternative for real estate firms to raise capital and offer investors exposure to the growing Indian real estate market.
Mutual funds pool money from investors and invest it in a portfolio of securities like stocks, bonds, and money market instruments. This allows small investors to access a diversified, professionally managed portfolio. There are two main types of mutual funds: open-ended funds that continually issue and redeem shares based on net asset value, and closed-ended funds that issue a fixed number of shares through an IPO that then trade on an exchange. Mutual funds are operated by asset management companies and overseen by a regulator. They provide benefits like accessibility, liquidity, diversification, and professional management.
A mutual fund is a professionally managed investment fund that pools money from many investors and invests it in stocks, bonds, and other securities. The value of an individual investor's shares is based on the total value of the fund divided by the number of shares. Mutual funds provide investors with diversification and professional management of their investment portfolio.
This document provides an overview of Swastika Investmart Ltd., a stock broking and financial services company based in India. It details the company's vision, mission, leadership team, services offered including stock broking, derivatives, commodities, currency, and depository services. The summary highlights the company's growth over time in obtaining memberships in various exchanges and expanding its service offerings and client base to become a leading financial services provider in India with over 250 employees and 30 branches nationwide.
The document discusses Religare Securities Limited, an Indian equity and securities firm, and provides details about its operations, locations, partnerships, and offerings. It also defines what a mutual fund is as a pool of money collected from investors to invest according to predefined objectives, and lists some characteristics and advantages of mutual funds. Religare is aiming to build itself as a globally trusted brand in financial services and be the "Investment Gateway of India" through its retail, institutional, and wealth management services.
This project report summarizes the working and trading procedures of the Indian stock market with reference to Anand Rathi, a leading Indian brokerage company. It provides an overview of Anand Rathi, including that it was founded in 1994 and offers various financial products and services. It also describes key aspects of the stock market like the primary and secondary markets, stock exchanges in India, SEBI, opening a demat account, online and offline trading, derivatives, commodities, mutual funds, insurance, and portfolio management.
National Investment Trust (NIUT) is Pakistan's largest and oldest mutual fund, with a portfolio valued at approximately Rs. 63 billion invested in around 389 listed Pakistani companies. NIUT has over 48,847 unit holders and invests primarily in equities that correlate highly with the Karachi Stock Exchange 100 index. The fund offers investors professional management, diversification, and convenience.
This document discusses security analysis and portfolio management for a Master's degree project. It includes a title page, declaration by the student, preface, acknowledgements, table of contents, and executive summary. The project focuses on analyzing securities and managing portfolios for IIFL, an Indian financial services company, under the guidance of a professor.
Introducing social responsible investment sri sukuk in malaysian market (1)Quastan Alias
The document discusses introducing Social Responsible Investment (SRI) Sukuk funds in the Malaysian market. It aims to examine the need for introducing SRI Sukuk, identify the benefits of SRI Sukuk, and suggest important aspects to include in the SRI Sukuk framework. The introduction of SRI funds could help keep Malaysia up to date with global financial trends and satisfy increasing demand for Shariah-compliant funds. Potential benefits include SRI Sukuk having convincing characteristics for Muslim investors and serving as a platform to encourage and assist national development projects.
This document provides a comparative analysis of mutual fund schemes. It discusses types of mutual funds according to maturity period and investment objective. The facilities provided by mutual funds to investors are also outlined. The document analyzes the performance of various mutual fund schemes of different companies using metrics like beta, alpha, and standard deviation. Key findings are that ICICI PRU and Franklin Templeton funds have strong stock picking styles and risk management. Reliance funds can provide high returns but are not suitable for conservative investors. HDFC funds provide stability through large cap exposure. In conclusion, mutual funds provide a good investment option for committed, long term investors.
SAPM - Portfolio Construction and Comparison for Securities on BSEBishnu Kumar
This document presents a study on portfolio construction and comparison of securities listed on the Bombay Stock Exchange (BSE). It begins with an introduction to modern portfolio theory and the single index model. It then discusses factors that impact company performance such as economic, industry and company-specific analyses. The document outlines the study's objectives, methodology and data analysis approach. It describes calculating beta and constructing optimal portfolios using the Sharpe single index model. The document compares the resulting portfolios and provides observations. Tables with portfolio construction worksheets are also included.
The document provides an overview of JS Investments Limited (JSIL), one of the largest private asset management companies in Pakistan. It discusses JSIL's history, vision, mission, objectives, products and services which include various mutual funds. It also summarizes JSIL's major investors and some of its key investments in industries such as sugar, fertilizers and transportation. Performance metrics for different asset classes are presented along with JSIL's future outlook. Major investors in JSIL include companies, financial institutions, insurance firms and individuals both locally and internationally.
The document discusses the results of a study on investment preferences among 100 investors in Surat, India. It finds that most investors are aware of traditional investment avenues like bank deposits, mutual funds, gold/silver, and real estate. Moderate risk investment avenues like mutual funds are generally preferred. When choosing investments, safety and surety of returns are key factors. The study recommends that investors allocate funds to real estate, gold/silver and mutual funds to achieve higher returns with capital safety.
Sokouk Al-Intifa'a is an Islamic financial instrument that represents ownership in the usufruct (right of use) of an asset such as real estate. It allows investors to purchase shares in the cash flows generated by leasing the asset. Sokouk Al-Intifa'a can be used to raise funds for large projects by securitizing revenue streams from leases. As the document explains, it has potential benefits for real estate development, hospitality industries, and as a tradable instrument on money markets. The presentation concludes by advocating for the continued development of Sokouk Al-Intifa'a and other Islamic financial instruments to meet the needs of investors and expand opportunities.
The Rajasthan Venture Capital Fund was established in 2002-2003 and is based in Jaipur, India. It is focused on providing financial and managerial support to small and medium enterprises operating in various sectors like IT, biotechnology, retail, agriculture, and healthcare. The fund currently has an active investment portfolio of 8 companies based in Rajasthan and the National Capital Region. Its objective is to support the growth of investee companies through equity investments, strategic guidance, and network connections. Individual investments typically range from 10 to 200 million rupees. The preferred exit route for investments is an IPO within 3 to 5 years.
Performance evaluation of mutual funds @ uti securetiesBabasab Patil
The document provides an overview of a study on evaluating the performance of mutual funds with reference to risk and return. The study was conducted at UTI Securities Ltd and analyzed equity diversified open-ended mutual fund schemes. The objectives of the study were to evaluate the returns and associated risks of mutual funds from different companies and evaluate investment performance using risk-adjusted measures. The document discusses the methodology, which involved collecting secondary data from reports by UTI Securities and other websites. It also provides context on mutual funds and classifications of mutual fund schemes.
Venture capital in India is a big action by the Indian government in the term of industry development. Venture capital having more problem and also denoted what will be scenario of Venture capital in future !!
Mutual funds have grown significantly globally over the past two decades. Total global mutual fund assets have increased over sevenfold from $4 trillion in 1993 to $28.9 trillion in 2013. The US mutual fund industry has grown to $14.3 trillion, while Europe grew to $9 trillion and Asia-Pacific grew to $3.3 trillion. Many countries outside Europe and the US have seen particularly sharp growth in their mutual fund industries in recent years.
The document lists potential topics related to finance, HR, and marketing. Under finance, topics include currency derivatives, mutual funds, online trading, assets management, share markets, dematerialized accounts, IPOs, and securities analysis. HR topics cover areas like recruitment, training, performance management, and retention. Marketing topics range from customer relationship management and satisfaction to distribution channels, branding, and dealer perception.
The Investment Corporation of Pakistan (ICP) was established in 1966 through an ordinance to develop Pakistan's capital market during a period when investors lost confidence. It was authorized with Rs. 200 million in capital to promote industrial development through activities like underwriting securities, developing mutual funds, and providing long-term loans. While it aimed to stabilize the stock market and spur economic growth, its investment portfolio grew to Rs. 2.18 billion in value by providing capital gains and dividends, with its largest investments in oil/gas and government securities.
Real estate mutual funds (REMFs) allow investors to invest in real estate projects without directly owning property. Some key REMFs in India include funds by HDFC, Kotak Mahindra, and ICICI. REMFs provide diversification compared to single property ownership and professional management. However, they also come with fees and the real estate sector in India has issues with liquidity and price inefficiencies. Overall, REMFs provide an alternative for real estate firms to raise capital and offer investors exposure to the growing Indian real estate market.
Mutual funds pool money from investors and invest it in a portfolio of securities like stocks, bonds, and money market instruments. This allows small investors to access a diversified, professionally managed portfolio. There are two main types of mutual funds: open-ended funds that continually issue and redeem shares based on net asset value, and closed-ended funds that issue a fixed number of shares through an IPO that then trade on an exchange. Mutual funds are operated by asset management companies and overseen by a regulator. They provide benefits like accessibility, liquidity, diversification, and professional management.
A mutual fund is a professionally managed investment fund that pools money from many investors and invests it in stocks, bonds, and other securities. The value of an individual investor's shares is based on the total value of the fund divided by the number of shares. Mutual funds provide investors with diversification and professional management of their investment portfolio.
what is Mutual Funds by Ihsanullah mansoorihsan467
I am Ihsanullah mansoor from Afghanistan currently enrolled student of the University of Haripur,Haripur,KPK,Pakistan at the department of management sciences.
Mutual funds in Pakistan allow small investors to invest in a diversified portfolio managed by professionals. There are two types of mutual funds - open-ended funds that continuously issue and redeem units, and close-ended funds that are listed on the stock exchange. Mutual funds are operated by asset management companies and regulated by the Securities and Exchange Commission of Pakistan. Mutual funds offer benefits like accessibility, liquidity, diversification, and professional management.
This document provides an overview of mutual funds in Pakistan presented by Muhammad Daniyal Munir. It begins with definitions of mutual funds and how they work by pooling together investors' savings and investing in stocks, bonds and other securities. The presentation then covers the history of mutual funds in various countries and Pakistan, describes the structure and flows within mutual funds, and discusses the different types including open-ended and closed-ended funds. It also examines the performance of mutual fund companies in Pakistan, benefits and risks of investing in mutual funds, and provides examples of specific mutual funds like the Meezan Islamic Fund.
Mutual funds pool money from investors and invest it in a variety of securities like stocks, bonds, and money market instruments. The document discusses the key parties involved in mutual funds like investors, trustees, asset management companies, distributors, registrars, custodians, and depositories. It provides a history of mutual funds in India, describing the entry of private players in 1993 and growth of the industry. The types of schemes, strengths, weaknesses, opportunities, and threats to mutual funds are also reviewed.
The document provides an overview of mutual funds in India, including:
1) It defines mutual funds as pooled investment funds that allow investors to invest in a diversified portfolio managed by fund managers.
2) It describes the structure of mutual funds in India including sponsors, trustees, asset management companies, custodians, and SEBI regulations.
3) It outlines different types of mutual fund schemes according to structure, investment objectives, and maturity periods.
Private equity and venture capital fundsLinel Dias
Private equity fundraising involves private equity firms seeking capital from investors for their funds. Investors become limited partners in the funds and benefit from investments made using the capital in that specific fund. Private equity firms also invest in their own funds, typically 1-5% of the total capital. The time it takes to raise capital depends on market conditions and the firm's past performance. There are different types of private equity funds such as leveraged buyouts and venture capital. In India, major private equity firms include ICICI Ventures, UTI Ventures, and Carlyle. Venture capital is high-risk financing provided to new businesses in exchange for equity. Venture capital funds pool money from investors to invest in risky startups
Mutual funds in Pakistan are registered as trusts under the Trust Act of 1882 and regulated by the Securities and Exchange Commission of Pakistan (SECP). Mutual funds were first introduced in Pakistan in 1962 with the public offering of the National Investment Trust. There are two main types of mutual funds in Pakistan - open-end funds and close-end funds. Open-end funds issue redeemable units, while close-end funds issue shares that are listed and trade on stock exchanges. The mutual fund industry in Pakistan is overseen by the Mutual Funds Association of Pakistan (MUFAP), which works to promote transparency, ethics and growth in the asset management industry.
This document provides an overview of mutual funds in Pakistan. It begins with definitions of mutual funds and how they are managed. It then discusses net asset value, the two types of mutual funds (open-ended and closed-ended), and the history of mutual funds in Pakistan. Major market players, the Islamic mutual fund industry, modes of investment, and challenges are covered. Specific funds currently operating in the market are listed, along with advantages and disadvantages of investing in mutual funds. The document concludes with sections on marketing, regulations for setting up mutual funds, fund documentation, and procedures for buying and redeeming units.
The document discusses the Islamic mutual fund industry in Pakistan. It provides an overview of how mutual funds work, the types of mutual funds, and the benefits they provide to investors. It also discusses the history and current state of the mutual fund industry in Pakistan, comparing it to the global Islamic mutual fund industry. Some of the major mutual fund companies in Pakistan are also highlighted as examples.
A mutual fund is a collective investment scheme that pools money from many investors and invests it in stocks, bonds, and other securities. This provides small investors access to a professionally managed, diversified portfolio. There are two main types - open-ended funds that issue and redeem shares continuously, and closed-ended funds that have a fixed number of shares traded on an exchange. Mutual funds offer benefits like diversification, professional management, liquidity, and low minimum investment amounts.
A Study on Performance of Selected Mutual Fund with Reference to Shriram Mutu...ijtsrd
Mutual funds are becoming a popular avenue for investment. There are numbers of schemes which can satisfy the different needs of investors. Different Asset Under Management companies are launching various schemes with diversified risk. In this Study, an attempt has been made to analyze the Hybrid Equity Fund. This is one schemes of five AMCs has been studied over the period of 5 years. The analysis has been made using a risk return relationship. Sharpe ratio is used as a tool to compare selected mutual fund schemes returns.Mean is used to calculate the average returns of five AMCs for 5 years, Standard deviation is used for risk. From the analysis, it is found that Shriram Hybrid equity Fund and Adithya hybrid Equity funds shows better performance when compared to ICICI, HDFC and NIPPON Hybrid Equity Fund. M. Nagasekhar | Dr. P. Basaiah "A Study on Performance of Selected Mutual Fund with Reference to Shriram Mutual Fund, Anantapururamu" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd51853.pdf Paper URL: https://www.ijtsrd.com/other-scientific-research-area/other/51853/a-study-on-performance-of-selected-mutual-fund-with-reference-to-shriram-mutual-fund-anantapururamu/m-nagasekhar
A mutual fund is a collective investment scheme that pools money from many investors to purchase securities like stocks, bonds, and money market instruments. Investors receive ownership shares in the mutual fund and a portion of the income it generates. A mutual fund is managed by an asset management company, with a portfolio manager overseeing the fund's investments. The net asset value (NAV) of a mutual fund is calculated daily based on the total value of its holdings divided by the number of outstanding shares.
A project report on awareness of mutual funds 1Nirali Nayi
This document is a project report submitted by Swati M. Suthar and Nirali D. Nayi for their Advance Diploma in Banking and Insurance at S.K. College of Business Management, HNGU, Patan. The report is about creating awareness of mutual funds and was conducted under the guidance of their faculty member Mr. Nisarg Khamar. It includes a certificate from their guide, preface, acknowledgements, executive summary, and the beginning of the introduction chapter which provides an overview of what a mutual fund is.
01 A study on investors perception about investing in mutual funds.docSayyad Aarif ALi
This document is a study on investors' perceptions about investing in mutual funds conducted by Kamya Wadhwani for her Bachelor of Business Administration degree. It includes an introduction to mutual funds, an acknowledgement of those who provided guidance and support, and an index of chapters to be covered in the study. The chapters will analyze data collected from respondents, provide findings and suggestions, and conclude the study.
01 A study on investors perception about investing in mutual funds.docSayyad Aarif ALi
This document provides details about a study on investors' perceptions about investing in mutual funds conducted by Kamya Wadhwani for her Bachelor of Business Administration degree. It includes declarations, acknowledgements, an index of chapters, and introductory sections on mutual funds, SBI Funds Management Private Limited, facilities offered by SBI, major competitors, scope and importance of the study. The objectives are to understand investors' needs, awareness of SBI products and services, benefits of investment accounts, tracking of wealth creation products, and customer satisfaction. The research methodology uses exploratory design with primary data collected through questionnaires and secondary data from books, papers and the internet.
This document provides details about a study on investors' perceptions about investing in mutual funds conducted by Kamya Wadhwani for her Bachelor of Business Administration degree. It includes declarations, acknowledgements, an index of chapters, and introductory sections on mutual funds, SBI Funds Management Private Limited, facilities offered by SBI, major competitors, scope and importance of the study. The objectives are to understand investors' needs, awareness of SBI products and services, benefits of investment accounts, tracking of wealth creation products, and customer satisfaction with SBI investments. Research methodology involves exploratory research design and collection of primary data through questionnaires and secondary data from sources like books and the internet.
This document provides an overview of Islamic investment funds. It begins by defining investment funds and unit trusts. It notes that investment funds can take the form of mudharabah or wakalah contracts. The document then discusses the classification of investment funds as either open-ended or close-ended. It provides examples of different types of funds categorized by investment portfolio, including equity funds, fixed income funds, money market funds, balanced funds, Islamic funds, sukuk funds, real estate investment trust funds, and exchange traded funds. The key differences between Islamic and conventional funds and how a unit trust works are also summarized.
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problems solved by zeeshan 15mba 25
1.
2. Assignment Submitted by .................. To sir /Madam
Q 1 (a): What is an investment company ? How would
you differentiate between managed and unmanaged
investment company ? Qoute at least one example of
each from Pakistan ?
Ans :
investment company
An investmentcompanyis a companywhose mainbusinessisholdingandmanaging securities for
investmentpurposes.Investmentcompaniesinvestmoneyonbehalf of theirclientswho,inreturn,
share in the profitsandlosses
A corporation or trust engaged in the business of investing the pooled capital of investors in
financial securities. This is most often done either through a closed-end fund or an open-end fund
(also referred to as a mutual fund) .
Investment companies are business entities, both privately and publicly owned, that manage, sell,
and market funds to the public. They typically offer investors a variety of funds and investment
services, which include portfolio management, recordkeeping, custodial, legal, accounting and
tax management services.
Managed Investment Companies
The most common type of investment company is the management investment company, which
actively manages a portfolio of securities to achieve its investment objective. There are two types
of management investment company: closed-end and open-end. The primary differences
between the two come down to where investors buy and sell their shares - in the primary or
secondary markets - and the type of securities they sell.
Closed-End Investment Companies: A closed-end investment company issues shares in a
one-time public offering. It does not continually offer new shares, nor does it redeem its
shares like an open-end investment company. Once shares are issued, an investor may
purchase them on the open market and sell them in the same way.
3. Example of a Local Closed ended investment company : GoldenArrow SelectedStocksFund
Limitedisa closedendedequitymutual fundlaunchedandmanagedbyAKDInvestment
ManagementLimited.The fundinvestsinthe publicequitymarketsof Pakistan.Itinvestsinstocks
of companiesoperatingacrossdiversifiedsectors.The fundinvestsindeepvalue andgrowthstocks
of companies.Itbenchmarksthe performance of itsportfolioagainstthe KSE100 Index.Golden
ArrowSelectedStockFundLimitedwasformedonMay9, 1983 and isdomiciledinPakistan.
Open-End Investment Companies: Open-end investment companies, also known as
mutual funds, continuously issue new shares. These shares may only be purchased from
the investment company and sold back to the investment company.
Example of a Local open ended investment company : NI(U)Tisan open-endequityFund
constitutedthroughaTrust Deeddated12th
November,1962 executedbetween National
InvestmentTrust Limited(NITL) beingan Asset ManagementCompany and National Bank of
Pakistan (NBP) beingTrustee tothe Fund.The Fundprimarilyinvestsinequitieslistedonthe stock
exchangesof Pakistan.
non-managed investment
companies
There is only one type of non-managed investment companies called Unit
Investment Trusts.
A unit investment trust, or UIT, is a company established under an indenture or similar
agreement. It has the following characteristics:
The portfolio is merely supervised, not managed, as it remains fixed for the life of the
trust. In other words, there is No day-to-day management of the portfolio.
The management of the trust is supervised by a trustee.
Unit investment trusts sell a fixed number of shares to unit holders, who receive a
proportionate share of net income from the underlying trust.
The UIT security is redeemable and represents an undivided interest in a specific
portfolio of securities.
Example : Unit Trust of Pakistan
Unit Trust of Pakistan (UTP) is a balanced fund that aims to preserve and grow investor’s capital
in the long term while providing a regular stream of current income on an annual basis. The Fund
4. operates a diverse portfolio of equity and fixed income investments whereby the equity
component is meant to provide the growth in capital while dividends on the equity component
along with the fixed income investments help generate the current income.
Refrenes :
(https://en.wikipedia.org/wiki/Investment_company)
http://www.investopedia.com/terms/i/investmentcompany.asp#ixzz4uAgUCkO3
Types of Investment Companies http://www.investopedia.com/exam-guide/series-26/investment-
companies/investment-companies.asp#ixzz4uAjlubZ7
(https://www.nit.com.pk/index.php?option=com_content&view=article&id=181&Itemid=272#?1)
(https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=20383660)
Types of Investment Companies http://www.investopedia.com/exam-guide/series-26/investment-
companies/investment-companies.asp#ixzz4uAuY9Cdt
(https://www.gulfbase.com/InvestmentTutorial/SubSection?id=33&SectId=58)
( http://www.jsbl.com/wealth-management/js-cash-fund/unit-trust-of-pakistan/)
Q1(b) : Explain investment decision making
process ? How direct and indirect investement
can be diffrenciated ? Support your answer
with local examples .
Ans :
In finance,aninvestmentisamonetaryassetpurchasedwiththe ideathatthe assetwill provide income
inthe future orappreciate andbe soldat a higherprice.
Traditional investmentscovers:
• Securityanalysis
Involvesestimatingthe meritsof individual investments
• Portfoliomanagement
Dealswiththe constructionandmaintenance of acollectionof investments
5. The process of analysing whether investment projects are worthwhile
Five main methods are used to asses an investment .
Payback
Net present value ("NPV")
Average rate of return ("ARR")
Risks
The time value of money
When considering investing in property, one should choose between
direct investment (owning one or two properties that are physically
rented out and managed) or indirect investment (shares in a
property loan stock or unit trust company).
Direct investment
Directinvestmentisdefinedbythe International MonetaryFund(IMF) as“Investmentthatismade
to acquire a lastinginterestinanenterpriseoperatinginaneconomyotherthanthat of the
6. investor,the investor’spurposebeingtohave an effective voiceinthe managementof the
enterprise.”Inpractice,thistranslatestoan equityholdingof 10 percentor more inthe foreign
firm.For example,the investorwhodecidestoinvestinatoll road isa directinvestor.
Buying the stock by name or buying shares in a company or investing in shares directly
though broker/subbroker is called direct investment.
Local example :Forexample FDIthroughChina andon Gwadar port will countedinDirect
investment.
Indirect investment
An indirectinvestmentisatype of investingopportunitythatdoesnotrequire the actual purchase
of the assetthat ultimatelygeneratesthe return.Thistype of arrangementisoftenassociatedwith
investinginreal estate ventures,typically bypurchasingstocksissuedbyareal estate companythat
inturn purchasesand maintainsthe propertiesgeneratingthe dividendsissuedtothe shareholders.
Indirectinvestmentisawayof investinginreal estate withoutactuallyinvestinginthe property.
Indirectinvestmentcanbe done inmanyways,includingsecurities,funds,orprivate equity.Most
investorsinterestedinindirectinvestmentwoulddosothrougha companyor advisorwhohas
experience inthistype of investing.
Local example: Mutual funds offered by different companies in Pakistan are type of Indirect
investment in which investor do not buy the asset .
Buying a mutual fund (having the same stock in its portfolio) is an indirect investment.
Refrences:
(https://enemsfinalyearprojectmadeeasy.com/2016/03/01/direct-and-indirect-investment-advantages-
and-disadvantages/)
( https://enemsfinalyearprojectmadeeasy.com/2016/03/01/direct-and-indirect-investment-advantages-
and-disadvantages/)
(https://www.bayt.com/en/specialties/q/295130/what-is-the-difference-between-direct-and-indirect-
investment/)
Q:2 You are advised to study the existing corporate
structure of National clearing company ,central
7. depositary company and stock exachange . write one
page on each of the organization and also draw flow
diagrams of each?
A capital market is a market for securities (debt or equity), where
business enterprises (companies) and governments can raise long-
term funds. It is defined as a market in which money is provided for
periods longer than a year.
The Capital Market of Pakistan has a triangular foundation comprising of the stock
exchange, Depository Company and NCCPL; the goal of all being an economically
stronger, moreprosperous PakistaniCapitalMarket.
National Clearing Company of Pakistan Limited
(NCCPL)
The National Clearing Company of Pakistan Limited has been formed to establish and operate a
national clearing and settlement system (“NCSS”)
Accordingly the Company was incorporated on July 3, 2001 to manage and operate the National
Clearing & Settlement System (NCSS) in a fully automated electronic settlement system. NCSS
Live Operations commenced from December 24, 2001. However, the Company became fully
operational in the year 2003-04 by inducting and handling clearing and settlement of all book-
entry securities through NCSS. Thereafter, any security which becomes live in Central
Depository System, on ready status, is accordingly inducted into the NCSS.
As a part of Capital Market Development Program of Asian Development Bank (ADB) in
Pakistan, the Capital Market Project Consultants, Arthur Anderson & Company were given
mandate to develop recommendations for a National Clearing & Settlement System (NCSS) to
replace the separate and individual Clearing Houses of three Stock Exchanges, namely Karachi
Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange by a single and
centralized entity.
key products and services offered by NCCPL are as under:
8. Issuance of Unique Identification Number (UIN) for each client.
UIN Information System (UIS) to access trading information directly by client through
NCCPL’s System.
Pre-Settlement Delivery Facility.
Reporting of Un-Listed TFC Trades by Market Participants.
Interbank Fund Transfer (IBFT) Facility for Members of NCCPL.
Implementation of Leveraged Market Products such as:
o Margin Trading System (“MTS”);
o Margin Financing System (“MFS”);and
o Securities Lending and Borrowing System (“SLB”)
Risk Management of Institutional Clients and Leverage Markets.
Computation, Determination and Collection of Capital Gain Tax “CGT”
National Custodial Services (NCS)
Organization flow Diagram
9. Central Depository Company(CDC)
Central Depository Company is recognized as the infrastructure backbone of the Pakistan Capital
Market and it is the sole securities depository in the country. In the past two decades, CDC has
also evolved as one of the leading and most prestigious infrastructure institutions in Pakistan
with a focus on the capital market.
CDC is the sole entity handling the electronic (paperless) settlement of transactions carried out at
the stock exchanges of the country. Through efficient functioning of CDC, all the market
settlement is in book entry form.
Primarily, CDC’s function was to operate the Central Depository System (CDS) for all financial
instruments traded in Pakistan Capital Market. However, with the ever growing capital market, It
10. has diversified its business beyond the traditional depository domain It offer the following
services as well:
Investor Account Services
Launchedin1999
Allowsthe retail investortoopenandmaintaincustodyaccountsdirectlywithCDC.
Trustee and Custodial Services
Launchedin2002
Servesasa Trustee toOpen-endandClosed-endMutual FundsandVoluntaryPensionSchemes.
Share Registrar Services
Launchedin2008
Providesshare issuingcompaniesstate-of-the-artfacilitiesof registrarandtransferagents,
includingcustomerdealingonbehalf of the companies.
ITMinds Limited
(Wholly owned subsidiary of CDC)
Launchedin2009
ProvidesBusinessProcessOutsourcing(BPO)serviceswhichinclude provisionof backoffice
functionstothe Mutual Fundindustry.
CISSII (Centralized Information Sharing Solution for Insurance Industry)
(Developed andmanaged by CDC Pakistan)
Launchedin2014
Offersonline informationsharingsolutionforthe life insurance industry.Itallowslife insurance
companiestoshare informationsuchasacceptance of claim, postponedordeclinedrisks,
malpracticesof agentsandgroup life claimsexperience forthe purpose of achievinggreater
efficiencyandtransparencyinthe Industry.
CDC Organization Flow diagram
11. stock exachange
The Pakistan Stock Exchange (PSX) is the stock exchange of Pakistan with trading floors in
Karachi, Islamabad and Lahore. PSX was established on 11 January 2016 after the merger of
individual stock exchange's of Karachi, Lahore and Islamabad PSX's origin's where laid with the
establishment of the Karachi Stock Exchange in 1947, the Lahore Stock Exchange in 1970 and
the Islamabad Stock Exchange in 1992. As of May 28, 2016, there are 560 companies listed in
PSX and the total market capitalisation is $98billion.
12. The investors on the exchanges include 1,886 foreign institutional investors and 883 domestic
institutional investors along with about 0.22 million retail investors. There are also about 400
brokerage houses which are members of the PSX as well as 21 asset management companies.
PSX was reclassified as a MSCI Emerging Market in May 2017. While, the FTSE classifies PSX
as a Secondary Emerging Market.
PSX is among the world's best performing stock market's, between 2009 and 2015 it delivered a
26% a year. In December 2016, PSX sold 40% strategic shares to a Chinese consortium for $85
million
PSX Flow Diagram
Refrences:
https://dps.psx.com.pk/webpages/crp_information.php
http://cdcpakistan.com
https://www.nccpl.com.pk/
(https://en.wikipedia.org/wiki/Pakistan_Stock_Exchange)
13. Q#3(a) : Discuss different types of Funds
available to the investores in Pakistan ?
Ans :
Following types of funds are vailable to
the investors in Pakistan .
Equity Scheme:Anequityscheme orequityfundisafundthat investsinEquities
more commonlyknownasstocks.The objective of anequityfundislong-termgrowththroughcapital
appreciation,althoughdividendsandcapital gainrealizedare alsosourcesof revenue.
Example :
ABL Stock Fund (ABL-SF) is an open end equity fund.
Salient Features:
Minimum investment from Rs.5,000/-
Encashment anytime
Tax Exempt (as per Current Tax Law)
Tax Credit of up to Rs.75,000/- for individuals*
Suitablefor investors with a long term horizon
14. Other : AKDOpportunityFund, AlfalahGHPAlphaFund, Askari EquityFund, AtlasStockMarket
Fund, PIML Value EquityFund , FirstHabibStock Fund, JS GrowthFund , LaksonEquityFund, UBL
Stock Advantage Fund
Balanced Scheme:These fundsprovide investorswithasingle mutual fundthat
investsinbothstocksand debtinstrumentsandwiththisdiversificationaimedatprovidinginvestorsa
balance of growththrough investmentinstocksandof income frominvestmentsindebtinstruments.
Example :
Meezan Balanced Fund
Meezan Balanced Fund is a Shariah Compliant open-end balanced scheme.It is a tool that provides exposure to both
Equity and Debt markets through a single fund.The earnings are generated by potentialcapital appreciation and regular
income. Meezan Balanced Fund ( previously a closed end balanced scheme ) was converted into an open-end balanced
fund with effect from July 1, 2013.
Other :Faysal BalancedGrowthFund, FirstHabib IslamicStockFund(Formerly: FirstHabib
IslamicBalancedFund) ,
Asset Allocation Fund:These Fundsmayinvestitsassetsinanytype of
securitiesatanytime inorderto diversifyitsassetsacrossmultiple typesof securities&investment
stylesavailableinthe market.
Askari AssetAllocationFund
15. In line w ith our unique philosophy, the Asset Allocation Fund does not trackthe StockIndex as a benchmark, instead the strategy
w orks towardsmeasured goals, and allow s the investor to build and follow an objective, i.e. earn Risk Free + 4% (CAGR) on a
rolling period of 3 years. This philosophy makes the investment, 'Objective Based'. The strategy calls for investments in
fundamentally stable companies and uses market volatility to its advantage.
Other companies :
PIML AssetAllocationFund,Faysal AssetAllocationFund,HBL IslamicAssetAllocationFund,MCB
PakistanAssetAllocationFund
Fund of Fund Scheme:Fundof Fundsare those funds,whichinvestinother
mutual funds.These fundsoperate adiverse portfolioof equity,balanced,fixedincomeandmoney
marketfunds(bothopenandclosedended).
MeezanFinancial PlanningFundof Funds(Aggressive) ,JSFundof Funds, UBL Conservative Allocation
Planfundsof funds, NAFA IslamicPrincipal PreservationFundof funds.
Shariah Compliant (Islamic) Scheme:Islamicfundsare
those fundswhichinvestinShariahCompliantsecuritiesi.e.shares,Sukuk, Ijarasukuksetc.asmay be
approvedbythe ShariahAdvisorof such funds.These fundscanbe offeredunderthe same categories as
those of conventional funds.
16. ABL IslamicDedicatedStockFund,AtlasIslamicStockFund, PIML IslamicEquityFund, DawoodIslamic
Fund, Faysal IslamicSavingsGrowthFund, JSIslamicFund, NAFA RibaFree SavingsFund
Capital Protected Scheme:Inthis type of scheme,the paymentof
original investmentisguaranteedwithanyfurthercapital gainwhichmayaccrue at the endof the
contractual term of the Fund.Such fundsare for a specificperiod.
JS Capital ProtectedFundV ,NAFA IslamicPrincipal ProtectedFundI,UBL Capital ProtectedFundIII
Index Tracker Scheme: Index fundsinvestinsecuritiestomirrora
marketindex,suchasthe KSE100. Anindex fundbuysandsellssecuritiesinamannerthatmirrorsthe
compositionof the selectedindex.The fund'sperformance tracksthe underlyingindex'sperformance.
AKDIndex TrackerFund
17. Money Market Scheme:Money Market Fundsare among the safestand
moststable of all the differenttypesof mutual funds.Thesefundsinvestinshortterm debtinstruments
such as Treasurybillsandbankdeposits.
ABL Cash Fund, AKDCash Fund, MeezanCash Fund , AlfalahGHPCash Fund, Askari SovereignCash
Fund
Income Scheme:These fundsfocusonprovidinginvestorswithasteady
streamof fixedincome.Theyinvestinshorttermandlongterm debtinstrumentslike TFCs,government
securitieslike T-bills/PIBs,orpreference shares.
ABL Income Fund, MeezanIslamicIncome Fund,AlfalahGHPIncome Fund,Askari IslamicIncome Fund
Aggressive Fixed Income Scheme:The aim of
aggressive income fundistogenerate ahighreturnbyinvestinginfixedincomesecuritieswhile taking
exposure inmediumtolowerqualityof assetsalso. CommodityScheme:Theseschemesenablesmall
investorstotake advantage of gainsincommoditiessuchasgoldthroughpooledinvestments.They
investatleast70%of theirassetsincommodityfuturescontracts,whichinclude bothcash-settledand
deliverable contracts.
18. AKDAggressive Income Fund(Formerly:AKDIncome Fund) ,AlfalahGHPIncome MultiplierFund,Askari
HighYieldScheme ,Faysal Income & GrowthFund
An investorcaninvestinanyof the above categoriesof fundsinaccordance withhisrequirementsand
appetite forrisk.Forexample those whowanttoearnhighreturnsovera longerperiodcaninvestin
EquityFundswhereasthose whowanttoinvestforshortterm withreasonable returncaninvestin
MoneyMarket Fund.
http://www.mufap.com.pk
(http://www.aiml.com.pk/funds.php?fund=Askari%20Asset%20Allocation%20Fund&fundid=2)
(https://www.almeezangroup.com/what-we-offer/mutual-funds/balanced-funds/)
http://ablamc.com/funds/abl_stock_fund/)
Q#3(b)
19. Important terms to know . before answering above
questions.
Benchmark
A benchmark is a standard against which the performance of a security, mutual fund or
investment manager can be measured. Generally, broad market and market-segment stock and
bond indexes are used for this purpose.
R-squared
R-squared is a statistical measure that represents the percentage of a fund or security's
movements that can be explained by movements in a benchmark index. For example, an R-
squared for a fixed-income security versus the Barclays Aggregate Index identifies the security's
proportion of variance that is predictable from the variance of the Barclays Aggregate Index. The
same can be applied to an equity security versus the Standard and Poor's 500 or any other
relevant index
Alpha
Alpha is one of five technical risk ratios; the others are beta, standard deviation, R-squared, and
the Sharpe ratio. These are all statistical measurements used in modern portfolio theory (MPT).
All of these indicators are intended to help investors determine the risk-return profile of a mutual
fund.
Beta
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to
the market as a whole. Beta is used in the capital asset pricing model (CAPM), which calculates
the expected return of an asset based on its beta and expected market returns. Beta is also known
as the beta coefficient.
20. (i)Which funds returns are best explained by the
market returns ?
Ans :
Fund number one is best explained by market`s return .
Reason :As the 1st fund has highst value of R^2 and +ve alpha and beta is aslo 1 so it is
best for investments.
98 % rpresents that there is a very good correlation between Fund returns and
benchmark`s return .
Value of alpha is +ve which means Fund is performing better than its beta would predicit
. while fund produced a return 2% higher than its beta would predict .
Beta of the market is taken as 1 so when we see the beta of Fund 1 we notice that it is
also 1 it means Funds excess return are aligned with benchmark index.
(ii)Which fund had the largest Total Risk ?
Ans :
FundFive hadthe largesttotal risk
Reason :Because fundfive hashighbetavalue amongall otherfunds whichis 1.2 itmeansit is
more more sensitive tomarketmovementsthe value of alphaisalsolow althoughitis+ve butas
comparedto otherfundsitis lowwhichmeansdifferencebetweenfund'sactual returnsandits
expectedperformance islesswhilethe R^2 of the Fund isalsoaverage whichis60% wile above 70% is
consideredgood.
(iii)Which Fund had the lowest market risk ?
highest risk ?
As ExplainedearlierFundnumber5had highestmarketrisk because itsbetavalue whichis1.2is very
highthan otherfundsand Fundnumber4 has lowestmarketrisk because itsbetavalue lowestthanall
otherfundsand R^2 value isalsogoodwhichis80% above 70% .
21. (iv)Which Fund(s) according to jensen Alpha
outerperformed the market ?
Accordingto jensenalphaFundnumber#3 outperformed the marketasitsalphavalue is3.5 which
meansFund#3 produceda return3.5 higherthanitsbita wouldpredict.whichishigherthanall other
funds.
Refrences:
Read more: Beta http://www.investopedia.com/terms/b/beta.asp#ixzz4uKiKRKQ8
Read more: Benchmark http://www.investopedia.com/terms/b/benchmark.asp#ixzz4uKga2I4X
Read more: Alpha http://www.investopedia.com/terms/a/alpha.asp#ixzz4uKhklq8y
Read more: R-Squared http://www.investopedia.com/terms/r/r-squared.asp#ixzz4uKh18Chc
Q4:
overvalued stock
22. An overvalued stock has a current price that is not justified by its earnings outlook or price/earnings (P/E)
ratio, so it is expected to drop in price. Overvaluation may result from an emotional buying spurt, which
inflates the stock's market price, or from a deterioration in a company's financial strength. Potential
investors do not want to overpay for a stock.
undervaluedstock
An undervaluedstockis definedasastock that issellingata price significantlybelow whatisassumed
to be its intrinsicvalue.Forexample,if astockis sellingfor$50, butit isworth $100 basedon
predictable future cashflows,thenitisanundervaluedstock.
Following stocks are under and
over valued see the picture
below
23. The securitiesthatare plotted above the SML, i.e.the risk-free rate,are undervaluedbecausetheir
expectedreturncomparedtotheir riskislow.Conversely,the securitiesthatare plotted below the SML
are overvaluedbecause theirexpectedreturncomparedtotheirriskishigh.
24. The security market line (SML)
The security market line (SML) presents the capital
asset pricing model (CAPM) on a graph, seeking to
demonstrate the levels of market risk based on the
hypothesis of a perfect market
25. The security market line (SML) of Stock A
The security market line (SML) of Stock B