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					MUTUAL FUNDS
                       HISTORY

•   UTI WAS THE ONLY MUTUAL FUND OPERATING SINCE 1964. IT IS
    AN OPEN ENDED FUND- UNITS CAN BE PURCHASED AND SOLD
    BACK TO UTI ANY TIME. IT WAS A PUBLIC SECTOR MONOPOLY
    POSITION FUND. MANY TAX BENEFITS WERE OFFERED FOR
    BUYING UNITS
•   SINCE 1987 MANY PUBLIC SECTOR BANKS SET UP THEIR MUTUAL
    FUNDS- FOLLOWING AN AMENDMENT IN THE BANKING
    REGULATION ACT-THAT COMMERCIAL BANKS CAN CARRY ON
    NON-BANKING BUSINESS.
•   MUTUAL FUNDS BUSINESS WAS THROWN OPEN TO PRIVATE AS
    WELL AS FOREIGN INSTITUTIIONS AFTER 1992—LIBERALISATION.
•   MUTUAL FUNDS CATER TO THE NEEDS OF SMALL SAVERS AND
    INDIVIDUAL INVESTORS.
                   DEFINITION
•   IT IS AN ASSOCIATION OR TRUST OF MEMBERS WHO WISH TO
    INVEST IN FINANCIAL INSTRUMENTS FOR MUTUAL BENEFITS.
    FUNDS COLLECTS MONEY FROM MEMBERS AND INVESTS SUCH
    MONEYS IN DIVERSIFIED PORTFOLIO OF FINANCIAL ASSETS WITH
    A VIEW TO REDUCE RISKS AND MAXIMISE INCOME. INVESTORS
    ARE BENEFITTED BY THE EXPERTISE AVAILABLE WITH THE
    MUTUAL FUND.

•   MUTUAL FUNDS ARE OF VARIOUS TYPES

•   OPEN ENDED
•   CLOSE ENDED WITH SPECIFIC TIME FRAME WHERE THE MATURITY
    MAY ALSO BE FIXED.
               TYPES OF MF..CONTD..

•   ON THE BASIS OF OBJECTIVES—
•   INCOME FUND
•   GROWTH FUND (CAPITAL APPRECIATION)
•   BALANCED FUNDS (INCOME AND GROWTH)

•   ON THE BASIS OF INVESTMENT PATTERNS—
•   INVESTMENT IN GOVT.SECURITIES
•   INVESTMENT IN DEBENTURES
•   INVESTMENT IN EQUITIES
•   SECTORWISE INVESTMENT
•   MONEYMARKET MUTUAL FUNDS
•   TAXATION FUNDS
             TYPES OF FUNDS..CONTD..

•   LEVERAGE FUNDS—THEY ARE USED TOINCREASE THE SIZE OF
    THE VALUE OF PORTFOLIO(BORROWED FUNDS)
•   DUAL FUNDS- SINGLE INVESTMENT OPPORTUNITY FOR TWO
    DIFFERENT TYPES OF INVESTORS –INCOME UNIT AND CAPITAL
    UNITS.
•   INDEX FUNDS- THE PORTFOLIO IS DESIGNED IN SUCH A MANNER
    THAT THEY REFLECT THE COMPOSITION OF SOME BROAD BASED
    INDEX –SECURITIES IN THE SAME PROPORTION AS INDEX. IT
    INVOLVES LESS ADMINISTRATIVE EXPENSES AND LOWER
    TRANSACTION COST.
•   BOND FUNDS– PORTFOLIO CONSISTS OF FIXED INCOME
    SECURITIES –BONDS.
•   OFF-SHORE FUNDS– MEANT FOR NON-RESIDENT
    INVESTORS.REGULATED BY THE PROVISIONS OF THE FOREIGN
    COUNTRY WHERE IT IS REGISTERED.
        IMPORTANCE OF MUTUL FUNDS

•   CHANNELISING SAVINGS
•   OFFERING WIDE PORTFOLIO INVESTMENT
•   PROVIDING BETTER YIELDS
•   EXPERT INVESTMENT ADVICE AT LOW COST
•   TAX BENEFITS
•   PROVIDING RESEARCH SERVICE
•   INTRODUCING FLEXIBLE INVESTMENT SCHEDULE.
•   SIMPLIFIED RECORD KEEPING
•   SUPPORTING CAPITAL MARKET
•   PROMOTING INDUSTRIAL DEVELOPMENT
•   KEEPING MONEY MARKET ACTIVE.
              RISKS OF MUTUAL FUNDS

•   MARKET RISKS
•   SCHEME RISKS
•   INVESTMENT RISKS (EXPERTISE)
•   EXTERNAL RISKS

•   ORGANISATION OF FUND
•   SPONSORING INSTITUTION PROMOTING FUND
•   TEAM OF TRUSTEES.
•   ASSET MANAGEMENT COMPANY TO DEAL WITH FUNDS ASSETS

•   EXPENSES MAXIMUM 1.25 % IF THE FUND IS LESS THAN 100
    CR.AND 1 % IF IT EXCEEDS 100 CRORES.
    FACILITIES AVAILABLE TO THE INVESTORS

•   REPURCHASE FACILITY
•   REISSUE FACILITY
•   ROLL OVER FACILITY (REINVESTING FOR ANOTHER TERM)
•   LATERAL SHIFTING FACILITIES
•   SIP

• NET ASSET VALUE– TRHE REPURCHASE PRICE IS LINKED
  TO NAV. IT IS MARKET VALUE OF THE SECURITIES HELD
  DIVIDED BY THE NUMBER OF UNITS.. IT IS THE INTRINSIC
  VALUE OF THE UNIT.
            INVESTORS’ RIGHTS

• UNIT CERTIFICATE WITHIN 10 WEEKS FROM DATE
  OF CLOSURE FOR CLOSE ENDED AND 6 WEEKS
  FOR INITIAL OFFER.
• TRANSFER WITHIN A PERIOD OF 30 DAYS.
• REFUND OF APPLICATION MONEY(STATUTORY
  MINIMUM AMOUNT 20 CRORES FOR CLOSE E
  NDED ,50 CRORES FOR OPEN ENDED OR 60 % OF
  TARGETED AMOUNT WHICHEVER IS
  HIGHER.APPLICATIOPN MONEY HAS TO BE
  RETURNED WITHIN 6 WEEKS
          SOME SHORTCOMINGS OF MFS

•   DISPARITY BETWEEN NAV AND LISTED PRICE
•   NO UNIFORMITY IN CALCULATION OF NAV
•   LACK OF TRANSPERANCY
•   POOR INVESTOR SERVICING
•   EXCESSIVE DEPENDENCE ON OUTSIDE AGENCIES
•   ABSENCE OF QUALIFIED SALES FORCE
•   INVESTORS EXPECTATIONS ALWAYS RISING -=-HENCE BIG
    PROMISES.

				
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posted:8/28/2011
language:English
pages:10