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By Dr.V.Aditya Srinivas
2010 BSE Institute Limited
Mutual Funds
Indirect way to participate in capital markets. Mutual Funds is collective pool of money of investors.
Constituents of MF
Sponsor (Entrepreneur) Trustees AMC (Asset Management Companies)
Cont.
1. Open ended fund : It is a fund which can issue and redeem units at any time. 2. Close ended fund :It is a fund which has a lock in period during which the units cannot be redeemed.
Cont.
Growth Fund : 100 % Investment done in equity market. These funds are more volatile, rising more than other funds in bull market & falling more in bear market. Balanced Fund :65 % of the investment done in Equity & 35 % in Debt instruments. Such diversify holdings ensure that these funds will manage downturn in the stock market without too much of a loss.
Cont.
Debt Fund : 100 % investment done in debt instruments which includes short term bonds , long term bond, money market funds. Sector Fund : Investment done entirely or predominately in single sector. It tend to be more riskier, more volatile & less diversified.
Cont.
Index Fund : 100 % investment done in Index shares. Such as Reliance Ind., Tatasteel, TCS , Bhartiairtel , BHEL , Infosys, HDFC Bank , ICICI Bank etc.. ETF : Exchange Traded Fund are traded on the stock exchange. They can be bought and sold any time in the day ( unlike most mutual funds.)
Cont..
FOF : Fund of Funds refers to the mutual fund which invests in other mutual funds. For e.g. HDFC Mutual Fund invests in Reliance Mutual Fund.
What is SIP ?
SIP stands for Systematic Investment Plan It is based on Rupee Cost Averaging Automatically times the market It is tool for Wealth Creation in the long run
Funds need to keep 5 % of AUM as cash to meet day to day redemptions units
KIA has given $ 1 billion to 5 local Mutual funds in India Birla Sun Life Mutual Fund DSP Black Rock ICICI Prudential Canara Robeco Mutual Fund Franklin Templeton Each MF has been allocated $ 200 million
Thank You
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