Chapter 14 inmonccriOn a 7 sive ie wax The eving face of ma fan hay at together with he income earned in he orm fiero vagal Poone Sie ops hey cnt he natin pane, Onc Den SS ea Biss jot wits Re 100 cach fom se f eter peoples Ber ene col Gebensexn.a commanding fae an hyo cn the economies of pe eho raraer ner uplands os proteasnally quae gant 6 Thus every lavestoe whether igo anal, wl fave stake In ean enjoy the wie porto of he eran hl by he and. Sb fal anne ne opre ips vk a ON tothe fact of fund an ey ap alt Ve em Maa Rt Ben ae {0 a mutual and belongs tone (0) Sect mesos cao ne pine mage lh nd (a) The po of fonds collect nveste ina pote of marketable (6) The avert tar in ‘re inthe ce of sh ‘api of compiny, The wl vale ind nce funds in pectic ater ke F cco beta onser oracle he usc rough he ae fun to hs pi ‘Thess mal funds ate roe fo Uni Trusts in the UK: an ae (Open End Investment compen te Usa Therefor Kam KOs etnes ‘pen end invenment comenny Zan areninen foe fete Time at hl denying ate va aa ‘Aesoring to Wet J red and Brghary Bugene, Fy Unit Tits 6 ~corporatans hich accept ols omstve and then we tne las ‘uy sac ng les teins by bars Seven nts corprtns pos! nts and ha ae se nn at Bpin and Colonial Govern Tet Laon Opes were popula in indi ganed mocnentu say 198 ne Jor 14 wih he art ena aang ment ure one can Sind a vaiiy af veniors wh ects and ‘capaci: Fur tance, Youre “api opps ris fd ed Re Te) Cree ' | | | \ | | nS 77 Gee shonin te see fo ‘Mata Fond eg etl oe a Une acheme the corpus of he fund aes dation pe Tnolher words the corpus the und an the numba ce Ale \masvance Once he subscipnan seach: the reaanceet Sawai Bleed Alter tne expty a he fined eee Thea [oparten eth hoiing Thus te hnd ceases kes Bereand/ortne mrs (0 Once the period & over anor Aloe fore inventors They aefunds cate heavy ess since The enty to MMME4 ie rected oly 1 in he sulin MMF canine oni slike Cette of Depots yl They ca aso ld to all tn i nd a ht ae ee a ee ce unde have ben prmied nrny is bat ste only and siya armed people wh want oenoy th of Febusey and Mareh 1 il at “overedundr Ste 8 of he Income irae pay ees neo eof yorlld toon hen te gues fom the Borrowed funds are more than Ue eat of UH) Daa ands Thi i pian of lose en (on. 1 prvi sing nese opperuny er vaste pes of vor oe Fats" inca inves wine sek carent investment Income ca uc Te A ater c panes aaa Shppe i Ns epee cl funds dilerent om > bleed fun {0 nds Funds nde nds eo one ins hare pana ited wattel index Tiss don by baling seu nthe somepropertan the nde lhe tale reel {i becuse nly fever purchase and sso stares OM PS () Mond funds These funds have polos oralatng mails Inco secures Wie bonds The sain trict ofthese funda a Income ata hat epi gains They cic om incor ands a ese Inca funds ofr an verge return Nghe than that om Ga Se td cpt pina lesen tha in ey shore {19 Aggrenive Growth Funds : Thee (onds are jst a Sond tine fans pal pw ene a ‘thee funds rept pi” Hence, he nds ae gene SSA Specie socks Ty ay ao ve specie este EM ‘Rent ters iading, option wetting ec Nataly, thee nde RHa ean seoreneet al rie or MPeAeMe cee ae | (90 Property Fund fs 9 ra rate mut nd an ovate Investment lo iis shre/Son of compan iveved i ea re tsnang deetone en 204 ther In nda numberof ofahare fonda st “dia Fund” an Inda Growth Fund wre ane by the UT UK ond USA erpectivey.Te Ste Banko Indin ted the Inia Magram Fund Services Ld ala oat “Commons Egy Far (00 Fund-o-funis A und of finds scheme eae fund chee (©) Real Ete Mal Fane (REME) | seed as Food eae roses Wo HOPE Rel Bate | Fund wuh's corpus of Re 1000 or o ive im comme eset Honpaity nad meget projec over Inala fo cca cn ines aprend scons ao tone Tn THPORTANGE OF MUTUAE FUNDS = AAV aiange Same ob mld ny at wager abel evs ger tees nen Bre tion | | ie (W Channatsng Seeing For nv ‘evelopment a he venory ‘Seed by Ms 30 oto moet Terai te dent oa fs ten savings wel Fecal sd ea surest ono fs tsspredy devlopment. Aga. iy pd cna Baty (i Ofering Wide Portfolio Incestment NOR ei Pd er eee ‘han ie use eso hy ea for lige Sosa bares eaihl fey cy seater engin yap ea ui Prolsng Beier they are able fo commana Deiter market aes aed owerr SES, psn‘ waroaton cons o lege investments are dently Seon nesta fc a the proiaa motoa Fond Soon S's te vetoes by wy 0 diene ana expt appreciation ‘tafon peng oar he noe ae cared fhe {ha Renering Exported Investment Serie t Lou Coss The management ofthe und geal signed to profesanas who “ian dan a ae Fea ys he yr {hat at interest ue to the complex natre ofthe secure arb ‘ttyl investor cannot do ll twat orks by moa or he canna Prolsionl manager whe manages Indust porolos in such a ae, be ‘yas angementie the median ewe ag ‘mt fond abe cmon vast aout nce pombe ‘or hahawe an indepth ty an ey out easeh on ep 1h Fue load bt tema ots etsy enaiges the ‘sip inti Snr te fart by 3 ‘scrch Sine esac velvet ers and espe, St ravidual ues anno ops wor By Miveting ina ual fod, ‘he Investor pte he bene the resent done bythe Fa (6s Offering Tux Henefs Certain funds offer tax bones 40 is cutomers, Thus, apart from ste re cpa append he Yorinetance under anton 8 of he Inge Tx At wm of Re 10000 recoved ss dvidena (613000 wo UTI rm b MF ty Seduce om the income Unser scan 8A 20% the aan vente showed ed irom the tan pape Unde the Wealth Fan Ac verte fans thse ar ally exempt fem a alam ns Baal othe compa fave pay lanes a Uy CaN ‘kectane dividends ony rm the poate Bae al fade et {ot tntroducing Flenbte Inentment Sched trom enn schetne to acter ad this exbity treat boon {Meow Unis can be exchanged for growth walte depending spam frsformanc of the funds Ove cannot derive such seni © ete (oid Proading Greater Mordabey and Luly ‘ren a vty small inventor can allo to invert in Mutual Funds Ty proneanstaciveandcoseflciveaeatve direct puch of shen iheateenceol Mts ual avestorr canna tunkot pa ticpaing numer ‘vestments with such a engre sum, Again, therein rete gue ‘Unita can wold to the Fund stay tne othe Nel Asset Vale and sulk acess a lguid cath ausure. Boiler, branches oth sponse Sink ay ready to provide loan acy again the wn een (69 Simplified Record Keeping ‘A este with usa inestent in 00 shares or 808.36 has to heep proper records of dividend payments, bonus ‘movemens, purchase oa triton thang ai oer tedious nd consumes alto tne Oe may even forget fights ir nal may have To frat the sare, Three ‘get proble or sl sed main wees Nove 9a ‘Poiana tapas ea then ith proceso‘st Acting a Subse for Il Pe Orgs HO) abl get lott ARTO engin Tha oy paca in Me eens ee uaaig in anata sees vompanie {so Reducing the Mareting Cost of New Issues i "he pmo nda ar she he ol Pac lenge 1s) Keeping he Money Makes Aetoe ey ue te ns sous owen @ oat tN ech po Market sks ‘Saget the pres ot hace Ke fiuceaans eens ee cee aspen hangs ee boar Kren Shap ESR He om Sanh ae mht ane Seopa ve eo We eo 8 . {00 Focstment ik "ater he ut und man nny aha oss depends wea. shennan sapere of At Soman «aN he | SSNPS Rss wore be fl af etre he enn Srsare'ssenmes foe oe iret ond ha ted on eae SER eterno (uns tok “Tecra 8 mld might have an ed surat bennett congy sates ey etc coat ee ‘Ryeent yay engender Re and tse sh oe ioe we a (paca ks ve Grrr ing wh het Hr conto eno {elie Ni en sha maternal Sola ore pata ae Ehager nenrnmen tg O oa of unt heh ee ‘tera wre ocy Rae ch wap SREANATON OF NIC TUND =e [Sein hasan gah a SN {0 A pase tuiet eee 00 Asenel alas 0 stern be cohen ant ‘Scncea RAN soe vane sper a ange anager Cay ANE) axon WaSores toy a ha ee Stat und depends upon he iengy os AM te Ace ngrona nena acento ee ih fats ried tartar ae eae Sale t ‘Schmieg 193 ome eh rena came fe bogh ety fom the Fond: She Tn ser 2 racecar o bung ceo Ns OCR ee ld iepurtce acy: Tg aa sree is pens iguaty neers Tepe ee cane cl open edd ache, wt can pe bog onl om he tu inch nce eng a he ov Naat aaa Sed eee re iccelnwerenen ence apa fo anaes tes An estore She market condita revling ave me of redemption Dy Ssor SSTWGn ver tel as opps in ne cae of cose ended fade ‘Some sual funds peat the investors to sit from one Scheme nother on te a he Net Aue ales wth lee to providing ah feat het opt, pe without ey docs on ‘Preto Ths sting sale tr! sng” “Tie prt pie wslvays Undo he Net Asch vd inveation wl the taste te sehome: eeu ohersGe “Bava waae ofeach The val ea uc naira TTT. the NAV sme than the Ince vlue ot ah a inate mo ivr ont i han ppc 1 0/Kes imal ondsin stesso dena Now Nay = 2S ahs ofeach ak)Giitmaner eamamovommmramee mena the eauilty market. These indepencient oon ee ere ae the pon of computing eure nea eB Benchmarks used inthe Mutual Fund Industry The same benchack can nol be aed fo lhe aches of muta I sien tm home fe ad ram and wo fd ape (0 Focsuty managed a egy porta (9 Yor broad bated equity portion St CNX 50 46) Foc bond tnd, Hx an index of Govern ond is used at 3 ihe fund's pole (Once the benim ee ten aoe aul kao how to eaune ‘Sovpare othe banca ir ido fave inde perorradl A conn “The SEDI ha nid down the following conditions fr the use of () ai ons tal te ly hese ents Fel de (4) The petod of compari of turns shoul! be dential forthe (ay te ac ler document nace benchmark for een ‘compan the ssn shoud be wad by the shee, (x) Growth funds wn moe than 6% in gut ul alays we sry of te start ces ike Senate NSE Nit, BSE 10 ed ELAS. Inte nae shoul be wed eons oughosAM I 2 7 Sienwhigotunameuaesoasenvnd mace! |b nt RUS Srna yon Func wr a ate! best tire | pene serv mete > oer oabenlonat ch earsness tense ik cele =? idsRetunEsauston ‘Sharpe Rao = 8/1008 wth Geneumats on 9 tak sed ba Horse ens or i roe ten 7 ‘The fandaranted apn utero since tis ing ee on Sad ase when compared to he bench | axemome FIND |] | TREVOR'S NODEL FOR FVALUATION eed De oe TnSharp' model the earn par ot of ak is mesa 2 cae of sundand Seinen (000, But nfockTeeyror's meds we = a ats iro se Sera eee reyes Ral) = (= RO wee Tovel of tak: Therefor, the en pat us take eerie a 1 represents retuen on fund, Ri fk ee ate of rer Bets e cepa ar neaaeey ae Michal eason ns developed anaes medal vo meas The telnet wi of k= 38/2 = 18 ofa lund sn in bun of rk tute facto clea Os ‘ ot the er peru a kor he nde her Keane ‘inthis pedormed beer n a fakaahsied bat "Yl haps gina it eg on tudjned bi Heath bad ne cope act ot ace a me ree ee ‘help ol tak fc ae{iy The gly of he poo iu and ho lalate fod ptarmence, (i) Pesormance in wan mare nds {0 Pevormance in ran oper grup comparisons nthe same E-nivan Gis RESTOR MGHTS aa @Unncentreates 0 Alves gh ree cerns en atm hin (0) Transfer of Unis ra (i) Refund of Appication ney elena [Adin every investor hat the right 0 eeseive formation about the ava intra oa Soars jhe ea a “Bid one mon nthe ase of ce ened lands H masta be pases tection te falling porta genes have sen aes be te ovement Growamrmmerth 6 Fnalin (Maton Fund shal be erable in the fore of Tass under the Indian Trust Ae and be authonised fox buses te aE (uy Mutual Fas shal be operated only by separily enabled Ase, Management Campanas (AMCs) (0) Atleast ofthe Bose AMC must be independent leas ‘esos mathave prolesina xperence of ata yea ne© SCAT a gad macau ep wah ltd rs had ob het pen acpi (Maton Funds sould invent only in naseable secu eer a (0) The mutual und scheme in any ne companys shies (0) i st of an be estended to 1% Hal the chemes of a mutt wd nt inves mae than 5% fs orp of ny ii apm (Espen (0 The AMC may cage she tl nd ith testa (4) The iia ne exper nou not exceed 6 (i Being ina ep er expen fb pd (© Diecloware ad Reporting GTheSEALG given ‘8) Every mutual funds equired to send its copies of duly audited anneal | Salento acura mony unacdd soa guey tater of rovers ine sacar xc ots sh | (iy TSE clay down te cnn pols he formal ond eons (09 git tabla down aconnonnetaig oa 0) on er ep pes ra (9 Each dosed nd scheme shuld be wound up ot Permasion ofthe SEB 3 s00n athe pesteening error tl (2) Viotation of Guide i ut nvestgaton, pose res a maybe pene (on Puree sae sing ots tage saline apf be moved SY fecmpt nen tapas tlre a 10 Consistency of Perormunce seh ie at aro pe tym an fn tet ptovmance an ond wich prac ser in ease tha hn a Contre mpeaemune ago aoe eines eget (a Mistrea Backaround “Thesis any funded gant compenvet te mange sing pei ae experience Tuas egy soul be a sone otter ou ws tt kage to ov fands sued a eases ee numrge (1 Cont of Operation ‘ut ands ek 1 te he este ud a tenet cont hin he naval Cuda for amen He he PereEe AMAR AMON oe VRPZTV WY (60 investor ‘he mow importa aco 0 be conadared is prompt and ellen serving Sri ie ick apne oestrone ‘nt eciene, quik Waar a ut umedae encanta ‘iw longa) Wi tng preston nthe ne esos santa hs hewn ond a the th mat nd nd he nino rate Of cute have 0 scenic ese behind (ou Transparency ofthe Fund Menagement the wanspaency fhe usenet nthe aye fiver eats, Ince aot aa ite mids of heres wunee Rehaonea e Tac rar akc oS See ere fie ani ete tanta argeareenne ak sy pe my Sal ves ho have Boney ~\ SonENCTAT HANNE AND MUTUAL FONDS Wiha sew 10 providing wide cole lo sal nv ovement of nd as pete bn tas, Ther a btn up el fr es ‘Held of mutual funds due to the following reasons: a j i {mania are not able provide bute anh savngs ad ned depot 1 Tiana nertetaies, wath swat tpatn er Stscv rev bar cree mar a emt stale compte tn thar 0 PFN Fig thee veces ve it he el ot (w Bem open igen ey Panktsd iaerming Sept {uo Ini vestry pctctny ral a min en HoTUEAenrrnty ay ao hate vo wen 0a {hrbogh pate thant irmediris On the other 7 has the backing ot 4 Dank, investor Tol come forward to invest. Thus Ba pulls conience! which is (00) Hala ana were ot pert op loro leven fords inthe market. Now ena i (0) nk can provide a wider range of procter Funda by inifeducing Innovative schemes and oli oleae tothe mutil fonds industy (90 aka as merchant ban have wide experience 9 te sen monoing ttl Pad tay ma 2 Oa (0) Te yok wou prove mah ees Maat Bund indsty which has ben hihots m UT "Tnls competion wl yprove customer sere unomer choi ssa {tI the Indian economy, the Eighties witnesed eines itn na encom interned procenscan ves hatnene’ by through mutual funda The proces tes ‘epotsnvomutal funda wuahd Sent teecapaal it vould provide a sustainable domestic soa (00 Above al he, investor servicing can be through ther neon of anche speedMerl Lynch ae very pop pouring a over § ie indy Ceara ere nl apt th aa ion mark nae US syne] Bir, Kotha wih oe TCH wi f° Mogan Dh Cenaty mi rer a tua da outer there fed ee orpn and soon Olas ee ep fp 2 fund ere pfosmance come Im apa a ecg son pent Promotes sors Some o temnhave daub tse macy witinapeviot | 19 give peerni tretret © mua uns tac sees Hs Tins teen vary ss snap pon asenureene nen FON ee pee Tanda have bean peered man avenue or inet 1) ro 19 The ies of ws of UT ch Toes a eto 10 eres an RS Hepes 21 India, Canara Bank, tndlan Bank, Bane ot eat Trek ermatua fund ndiny wasabetomobaseapproumatly R13 Sica ave rere ela Toad tet ree LC | es nn wh co eae ed sete peenty Aves Toy? here sere 0 Mutat Paw ves hd rey faces to mech avn nar ie tao pom comparaely slaw and ot Yn (aMobised by Mutua Funds Type of Schemes Se eg SONS FoR Low GROWN] iy breed at the ck of proper ping for hit NAY ea obe god ene psc ay | scapes meso ven ea na ‘etl tia vey ta a hy a a 1) Poor Investor Servte s en sya beet te uring po a ne ta Sivatdintie pepe neteanseh heats _e there where people have to wait for more than atx monthe ta 2 Scricne Ag pcg ei une ec Tey enn ce ung hve spay moe or bore pon Unatheyetp hares | —(00 Other Reasons sick mathe! and fice he hace ad hndaces oT desig. Abe ss wae othe mua and ina and We vadens probues Oa she ripe nowy Rsk ots aaa sere iy eet Said pr enadegh en oetear ‘Seis abate reat ra Sty iene ec Sry ee et erat | (Ui recente he ineretelno nn depols hare beh desing (0) Me wed of sy PE el, he ely of loge domestic tutional (©) Matus! Funds provide a wider range of products 0 a8 to ence the iver aed oft iver publ The estore oaks tome hl dilerenteapecins ike seu remot iui (91 The Goverment hala given he hese ene by preilng Ineconslon an txeumpns When he mutual fad indut Ie bound pom tare (00 The Department of Company Alas has agreed to amend the Companies Ato gant wing fightin compares fo mua and (oi Again mutual fur have been permite a undereteshafes ato. (0 Bh Union Ble 20.10 consns many eat 1 eng he (@) Permian t lunch cea evate mutual funds (i) Adoption o rests nots fe he alton of bt (8) Mana iting al concent cheese 6 Bh ty fr a i pias io All these actor would goa long neal popula lara Sd et ‘Shera esoutes productively fe sr ereprncun ate puta ‘Thoyactasavamedabetvenbank ‘higher la hans bank dope ae than ashore and hope mere asamy brothones tateanbectrehy annual ind LSS ingyen nae my {@htseral ating cy. (nai Income funds {ONiney maaan hme, riecmpy ahaa ete ; WW) Mecduak gunds—cchame in Fadia - 19) Mr Dndasstouy acr be 1g. Cr 8us th snattann +