Fostering Friendships - Enhancing Social Bonds in the Classroom
Project prasanna
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3. There must be at least 4 members in the Board of Trustees and at least 2/3rd of the members of the Board of Trustees must be independent.
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5. All mutual Fund Schemes floated by the AMC have to be approved by the Trustees.
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9. Every mutual fund shall along with the offer document of each scheme pay filing fees.
10. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor.
11. No one shall issue any form of application for units of a mutual fund unless the form is accompanied by the memorandum containing such information as may be specified by the Board.
12. Every close ended scheme shall be listed in a recognized stock exchange within six months from the closure of the subscription.
13. The asset management company may at its option repurchase or reissue the repurchased units of a close-ended scheme.
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15. Provided that moneys collected under any money market scheme of a mutual fund shall be invested only in money market instruments in accordance with directions issued by the Reserve Bank of India.
16. The mutual fund shall not borrow except to meet temporary liquidity needs of the mutual funds for the purpose of repurchase, redemption of units or payment of interest or dividend to the unit holders.
17. The mutual fund shall not advance any loans for any purpose.
18. The Net Asset Value of the scheme shall be calculated and published at least in two daily newspapers at intervals of not exceeding one week.
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20. Mutual funds help you to reap the benefit of returns by a portfolio spread across a wide spectrum of companies with small investments. Such a spread would not have been possible without their assistance.
22. Professionals having considerable expertise, experience and resources manage the pool of money collected by a mutual fund. They thoroughly analyse the markets and economy to pick good investment opportunities.
24. An investor with a limited amount of fund might be able to invest in only one or two stocks / bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by investing a number of sound stocks or bonds. A fund normally invests in companies across a wide range of industries, so the risk is diversified at the same time taking advantage of the position it holds. Also in cases of liquidity crisis where stocks are sold at a distress, mutual funds have the advantage of the redemption option at the NAVs.
26. Mutual Funds regularly provide investors with information on the value of their investments. Mutual Funds also provide complete portfolio disclosure of the investments made by various schemes and also the proportion invested in each asset type. Mutual Funds clearly layout their investment strategy to the investor.
28. Closed ended funds have their units listed at the stock exchange, thus they can be bought and sold at their market value. Over and above this the units can be directly redeemed to the Mutual Fund as and when they announce the repurchase.
30. The large amounts of Mutual Funds offer the investor a wide variety to choose from. An investor can pick up a scheme depending upon his risk / return profile.
32. All the mutual funds are registered with SEBI and they function within the provisions of strict regulation designed to protect the interests of the investor.
34. Investors can exchange their units from one scheme to another, which cannot be done in other kinds of investments. Income units can be exchanged for growth units depending upon the performance of the funds.
36. The pooling of funds from a large number of customers enables the fund to have large funds at its disposal. Due to these large funds, mutual funds are able to buy cheaper and sell dearer than the small & medium investors. Thus, they are able to get better market rates and lower rates of brokerage. So, they provide better yields to their customers. They also enjoy the economies of scale and reduce the cost of capital market participation. The transaction costs of large investments are quite lower than that of small investments. All the profits are passed on to the investor in the form of dividends and capital appreciation. Mutual funds have a return ranging from 12-17% p.a.
38. The management of the fund is generally assigned to professionals who are well trained and have adequate experience in the field of investment. The investment decisions of these professionals are backed by informed judgement and experience. Thus, investors are assured of quality services in their best interest. The fee charged by the mutual funds is 1%.
40. Mutual funds are not free from risks as the funds so collected are invested in stock markets, which are volatile in nature and are not risk free. The following risks are generally involved in mutual funds
42. In general, there are many kinds of risks associated with every kind of investment on shares. They are called market risks. These market risks can be reduced, but not completely eliminated even by a good investment management. The prices of shares are subject to wide price fluctuations depending upon market conditions over which nobody has control. The various phases of business cycle such as
45. There are certain risks inherent in the scheme itself. For instance, in a pure growth scheme, risks are greater. It is obvious because if one expects more returns as in the case of a growth scheme, one has to take more risks.
47. Whether the mutual fund makes money in shares or loses depends upon the investment expertise of the Asset Management Company (AMC). If the investment advice goes wrong, the fund has to suffer a lot. The investment expertises of various funds are different and it is reflected on the returns, which they offer to the investors.
49. The corpus of a mutual fund might have been invested in a company’s shares. If the business of that company suffers any set back, it cannot declare any dividend. It may even go to the extent of winding up its business. Though the mutual funds can withstand such a risk, its income paying capacity is affected.
54. Out of 10 equity funds HDFC shows the highest monthly return of 45.74% compared to others. In case of mean return also, HDFC shows the highest mean return 3.81%.
55. Beta is defined as the measure of risk. Canbank tops with a beta of .093 compared to other funds and Franklin with the least beta of 0.67.
56. KOTAK shows the highest standard deviation of 0.073 followed by others and Franklin with the lowest standard deviation of 0.057.