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Kultur Dokumente
A mutual fund is a financial intermediary that pools the savings of investors for collective investment in a diversified portfolio of securities. A fund is mutual as all of its returns, minus its expenses, are shared by the funds investors.
Advantages
Professional management Portfolio diversification Reduction in transaction cost Liquidity Tax benefits Transparency Stability to the stock market Equity research
Convenience Flexibility Protection of interest of investors Promoting, industrial development of the country
Sponsor
The sponsor is similar to the promoter of a company as he gets the fund registered with the SEBI. Sound track and general reputation for minimum 5 years Not have been found of guilty of fraud
He forms trust and appoints a board of trustees Also appoints AMC as fund managers And appoints a custodian to hold the fund assets. The sponsored is required to contribute at least 40% of the min net worth of the asset management company
The trustees
A mutual fund is a trust that pools the savings of investors and invests these savings in capital market/money market instruments. The duty of the trust is to review the performance of the fund and thereby safeguarding the interest of the investors.
Cont
A mutual fund in India is constituted in the form of a public trust created under the Indian Trusts Act,1882. The trust is formed by sponsor and registered with SEBI The fund sponsors act as the settler of the trust, contributes to initial capital and appoints trustees
Cont
Collected funds are managed by board of trustees, who are independent body and acts as a protector of the unit holders interest. At least 2/3 of the trustees are independent trustees
Manages the different investment schemes as per the SEBI regulation and the trust deed. AMC should be registered with the SEBI Net worth of at least Rs.10 crore in the form of cash Most AMCs in India are private limited companies
FIXED DEPOSITS Investment for a fixed period Assured return on fixed deposits
MUTUAL FUND SCHEMES No fixed tenure in open ended schemes No assurance for either returns of capital growth High returns
Low returns
Equity fund
Income
Domestic
Debt fund
Growth
Off shore
Interval schemes
Hybrid fund
Balanced
Investment classification
Equity fund Diversified Value Special Sectoral Derivatives arbitrage Tax savings
Debt funds Money market mutual funds Short term bond Long term bond Gilt Floating maturity plans Fixed maturity plans Capital protection Schemes
Other classification
P/E ratio fund Exchange traded funds Gold exchange traded funds Real estate mutual funds
Useful Terminology
NAV KIM OD Tracking error Entry and Exit load Expense ratio SIP STP SWP