Beruflich Dokumente
Kultur Dokumente
• Junk bonds
One Period Rate of Return
Current Yield
Realized Yield
Rate of return over a single holding period
C * PVIFA r, ( n –t ) + F * PVIF r, (n – t )
Where
C = Coupon
r = Reinvestment Rate
n = Term to maturity
t = Holding Period
F = Redemption Price
Rate of return earned by an investor who holds the
bond till maturity .
Laddered strategy
Barbell strategy
Load Structure:
Entry Load: Nil
Exit Load: Nil
Tax treatment:
Is taxed as per non equity mutual fund taxation rules.
Need not pay Wealth tax.
No worry on adulteration
Gold provides diversification to the portfolio
Gold is considered as a Global Asset Class
Gold is used as a Hedge against Inflation
Gold is considered to be less volatile compared
to equities
Held in Electronic Form
Store of value
Extremely Liquid
Parameters Jeweller Bank Gold ETF
FORM Bar or Coin Bar or Coin Demat form
SECURITY Investor’s Investor’s Fund house takes
concern concern the responsibility
New York Metal Exchange NYMEX New York, US Energy, precious metals,
industrial metals
Multi Commodity Exchange MCX India Energy, metals, precious
metals, agricultural
National Multi-Commodity NMCE India Metals, agricultural
Exchange of India
National Commodity and NCDEX India Metals, agricultural
Derivatives Exchange
Tokyo Commodity Exchange TOCOM Tokyo, Japan Energy, precious metals,
industrial metals,
agricultural
London Metal Exchange LME London, UK Industrial metals, plastics
The economic survey for 2008-2009 has recommended certain
reforms in the commodity markets
1. Bring commodity future regulations under SEBI
• Since commodity futures are part of the financial market bringing
all financial market regulations under SEBI is better.
• At present commodity futures are regulated by FMC
2. Lift ban on futures trading in rice, tur, urad
Futures trading of rice, tur, urad were banned in early 2007 as
trading in these commodities was perceived to be causing
pressure on inflation.
Lifting of ban on these commodities will restore price
discovery and price risk management.
Futures in wheat was also banned but the curve was lifted in
May this year.
Sugar has been put on the suspended list till December this
year.
FMC had recommended to the Govt. to lift the ban on all
commodities as there were no direct evidence to suggest that
futures trading caused price spiral.
3. Involve APMCs or State Mandies to expand the scope of
electronic trading
Two leading future exchanges in India – MCX and NCDEX
that has already launched electronic exchanges.
There are over 7500 APMCs where trading take place in the
physical form.
4. Removal of the Commodity Transaction Tax (CTT)
At present the tax is not enforced.
Insurance is a contract whereby, in return for the payment of
premium by the insured, the insurers pay the financial losses
suffered by the insured as a result of the occurrence of
unforeseen events.
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Engineering
Property & Casualty
Accident & Health
Liability
Specialised
Individual & Group
Economic Concept of Insurance:
1. Insurer offers policy to cover specified
risks
2. Insurer collects policy premiums from
customers
3. Insurer invests premiums
4. Insurer pays money to insured customers
in the event of losses covered by policy.
Opportunities in life
insurance
Life insurance premium as % of GDP
12.0%
10.7%
8.0%
5.7%
6.0%
4.4%
4.0% 3.4%
2.3% 2.3%
2.0%
0.0%
UK J apan Ko rea A ustrlia US M alaysia India China
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Opportunities in non-life
insurance
N o n -life in suran c e p rem ium as % o f G DP
5.0% 4.6%
3.0%
2.2%
1.8%
2.0%
0.9%
1.0% 0.6%
0.0%
US UK A ustralia Ko rea J ap an M alaysia C hina Ind ia
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Current Insurance landscape
Penetration is abysmally low at less than 3% of insurable
population* despite
The presence of an insurance market for a long period and
with 16 Life Insurance and 15 General Insurance active today
in the market
Existence of products to cover various risks
Equity risk: The risk that stock prices and/or the implied
volatility will change.
Interest rate risk: the risk that interest rates and/or
the implied volatility will change.
Currency risk: The risk that foreign exchange rates
and/or the implied volatility will change.
Commodity risk: The risk that commodity prices (e.g.
corn, copper, crude oil) and/or implied volatility will
change.
VOLATILITY RISK: In financial markets it is the likelihood of
fluctuations in the exchange rate of currencies. Therefore, it
is a probability measure of the threat that an exchange rate
movement poses to an investor's portfolio in a foreign
currency. The volatility of the exchange rate is measured as
standard deviation over a dataset of exchange rate
movements. A far more sophisticated extension of this
model is the Value at Risk method, which helps to determine
the actual risk exposure to a portfolio of several currencies.
Return and risk analysis by asset should take into account each asset's cash flow
prospects, given current leases, stipulated rental rates, annual rent increases,
expiration dates, probabilities of renewing, probabilities and time duration for finding
new tenants for non-renewed leases, and projected market rents at which new
leases will be signed and renewed leases will rollover. Lease renewal probabilities,
time for finding new tenants and rental rate projections should be based on market
vacancy rate projections, which provide a very good indicator of market tightness.
Investors
Securities
Diversification benefits
Low transaction cost
Availability of various schemes
Professional Management
Liquidity
Tax benefit
Flexibility
Well regulated
Convenient Administration
Return Potential
Transparency
Affordability
Risks
Instrument Risk
Market Risk
Portfolio Risk
Business Risk
Financial Risk
Risk in Money Market Funds
Risk in Bond Funds
Risk in Stock Funds
Beta indicates the level of volatility associated with the fund as compared to the
benchmark
Alpha is the difference between the returns one would expect from a fund, given
its beta, and the return it actually produces. An alpha of -1.0 means the fund
produced a return 1% higher than its beta would predict. An alpha of 1.0 means
the fund produced a return 1% lower.
Sharpe Ratio = Fund return in excess of risk free return/ Standard deviation of
Fund
The higher the Sharpe ratio, the better a funds returns relative to the amount
of risk taken. Sharpe ratios are ideal for comparing funds that have a mixed
asset classes
Last one Week Last one Month
Rank Scheme Name Date NAV Last 1 Rank Scheme Name Date NAV (Rs.) Last 1
(Rs.) Week % Month %
1 SBI Magnum Midcap Fund - Jan 11 , 23.12 4.7576 1 JM Basic Fund - Growth Jan 11 , 20.2104 10.4798
Growth 2010 2010
4 JM Agri & Infra Fund- Jan 11 , 3.4109 4.3504 4 Religare Mid N Small Cap Jan 11 , 11.66 9.2784
Growth 2010 Fund - Growth 2010
*Note:- Returns calculated for less than 1 year are Absolute *Note:- Returns calculated for less than 1 year are Absolute
returns and returns calculated for more than 1 year are returns and returns calculated for more than 1 year are
compounded annualized. compounded annualized.