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Mutual Funds
An investment instrument formed when investors pool their funds together. The mutual fund manager invests the sum in stocks, bonds, or other financial assets.
1,628 Questions
What are the disadvantages of mutual funds?
Disadvantages of mutual funds compared to owning securities outright - 1. Mutual funds charge you an annual maintenance fee as a % of assets, and in some cases a sales load too. Holding individual securities there is no charge once the broker fees are paid. 2. When you buy shares in a mutual fund, you don't officially own the securities held by the mutual fund. While this has little practical significance, I suppose in theory there could be problems of some sort. The risk of anything happening is small and shouldn't keep you from buying mutual funds for this reason alone. 3. Sometimes a mutual fund's investment philosophy changes over time without you being aware of it. You may buy a fund thinking they are a diversified fund and then two years, its drifted toward certain sectors or certain parts of the market. By the same token, sometimes a mutual fund starts participating in derivative markets and increasing its leverage, which introduces additional risk you should be aware of. 4. Changes in mutual fund management can bring changes too - sometimes they aren't as savvy (or as lucky) as prior management.
NFO mutual fund is a fund which has come out for subscription for the first time.
Most of the people think investing in NFO means higher returns but unfortunately the reality is far from this.
By investing in a new fund offer you are at risk as you have no idea of how the fund will perform. Also if the fund is being launched by a new AMC, risk is even higher as there is no track record of the performance of the AMC as well.
The objective of investment is to get returns. This is the reason why people will evaluate all the risks involved so as to estimate the return on investment.
Is bank allowed to transfer funds from one account to pay overdraft on another?
Banks can transfer funds from one account to another with your permission. Many banks have this option available to you when you open your account/s. Check with your financial institution.
A mutual fund consists of shares of company stocks. Investors can buy shares of funds and so own a small part of more stocks. There are other types of funds: bond funds, real estate funds, money market funds for example.
What are Advantages of a mutual fund?
Some advantages are:
- You need not follow the stock marketactively
- Professionally managed and hence chances of good returns are high
- You can invest in small amounts
What is the difference between gross expense ratio and net expense ratio?
Net Expense Ratio
The net expense ratio is the expense ratio of the fund after applicable expense waivers or reimbursements. This is the actual expense ratio that investors paid during the fund?s most recent fiscal year. Gross Expense Ratio
The gross expense ratio is the fund's total annual operating expense ratio. It is gross of any fee waivers or expense reimbursements. Why are these fees waived? In the case of funds with smaller assets, the gross total expense ratios may be much higher than net total expense ratios. This is true because certain fixed costs, such as legal and custodian fees, have a disproportionate impact on the expense ratio of a smaller fund in comparison to a larger fund. Mutual fund families also may choose to waiver fees to make the pricing of a fund more competitive. What types of expenses are included in the gross and net expense ratios? There is no difference in the types of expenses within a gross or net expense ratio. The net expense ratio is simply the gross expense ratio of a fund less any waivers or reimbursements. What caused the need for reporting both the gross expense ratio? Were there abuses of some sort going on? While there are no specific abuses of which we are aware, there is the potential that a fund family can discontinue a fee waiver without a shareholder vote. The NASD thought it was important that investors be aware of the potential gross expense ratio, in addition to the actual net expense ratio that investors paid. Ultimately this will not affect your investments or cause any reason for change. This is more or less a new reporting requirement that is put in place to provide as much objective information regarding a mutual fund as possible. You will still primarily be concerned with the net expense ratio since that is what will determine your real return, but you will begin to notice this additional number being reported on investment materials and online.
What is fund statement explain its purpose sources of fund applications of fund?
The fund statement states that the foundation provides financial assistance to "promising individuals proving acceptance into any accredited institution of higher learning". The fund has been established by many notable professionals.
The foundation provides financial assistance to promising individuals proving acceptance into any accredited institution of higher learning. The scholarship was founded on the belief that any desiring individual should have an opportunity to further their education, regardless of race, gender, orientation, creed, ethnicity, age, religion, ancestry, and economic and or social status. We are a hybrid establishment that provides the necessary assistance to those in need.
What is Top Down Fundamental Analysis?
Top down: you look at the market as a whole (principal economic factors and data) them you narrow down until your industry etc. etc.
Fundamental: you look at the principal ratios of a company compared to the industry. You look at the level of debt, profitability etc. etc. Basically you look at how the company performs in terms of financial performance. Fundamental analysis is the opposite of technical analysis which is just looking at trends and mathematical expression to forecast what is going to happen with a stock.
Top down fundamental analysis is just the 2 combined.
hope this will help !
Cheers,
An omnibus account is a stock account between more than one broker. The transactions involve combined individual accounts allowing for easier management.
Capital Management is basically an accounting strategy. It attempts to maintain sufficient and/or equal levels of capital, liabilities and assets for a company to ensure that it meets expense obligations. This often helps with temporary financial decisions that require the unexpected use of cash flow.
What is Source and application of funds?
sources of Funds
1. Profit from Operations
2. Issue of Shares
3. Issue of Debentures
4. Bank Loan (Long Term)
5. Sale of fixed Assets
Application of Funds
1. Expense for operations
2. Redemption of shares
3. Redemption of Debentures
4. Payment of Loans
5. Purchase of Assets
Can an asset management company can have multiple mutual fund under their name?
Yes they can. Most large AMC's have multiple types and categories of funds. For ex:
ICICI AMC has many types of funds under their governance some are:
- ICICI Tax saver
- ICICI Infrastructure fund
- ICICI Discovery fund
- ICICI Banking sector fund
- etc.
What does it mean that a fund may break the buck?
Answer When an individual or his investment advisor invest money in a money market fund, he expects dividends on regular basis and the investment to yield a certain return (as of June 2008, it is less than 3%). The management of a money market fund, to be able to accomplish this return and pay themselves management fees, has to reinvest this money also. They usually invest them in commercial papers, bank CDs, etc, and since these investments are not risk free, it is possible that they eventually can get back only part of the money they originally invested, thus braking the buck. In such situation the individual may be getting back, for example, 80% on every dollar invested. Answer If a money-market fund gives investors less than a dollar-for-dollar return on their investment, that occurrence is known as "breaking the buck." Basically it means that you are getting a yield less than zero.
There are numerous Mutual Fund companies throughout the world. The top MF companies in India are:
- HDFC Mutual Fund
- Reliance Mutual Fund
- ICICI Prudential Mutual Fund
- etc
Who is the controlling authority for mutual funds?
The Securities and Exchanges Board of India SEBI and The Association of Mutual Funds in India (AMFI) control the Mutual Funds in India
What is the difference between hedging and hedge fund?
Hedging is a general concept also which is made popular by the term "Hedging your bets". This is often done by betting on 2 opposing situations thereby turning a profit regardless of the outcome.
In finance a "hedge" is often accomplished by both shorting a stock and buying options to hedge yourself in the chance that the stock goes up.
A hedge fund is an unregulated investment fund that are popular amongst high-net worth and institutional investors. Hedge funds are different from mutual funds because they are not regulated, the hedge fund manager has the ability to buy and sell all types of assets, betting on rise and falls of securities.
Can US-based hedge funds invest in offshore hedge funds?
The certainly can invest in off-shore hedge funds. There are some restriction for individuals to invest in off-shore hedge funds, though, but hedge fund entities certainly can.
Off-shore hedge funds offer certain tax advantages to overseas investors, as well as endowment funds, and non-profit organizations. Individual Americans, must declare their earnings from off-shore hedge funds so in that regard they are not better of than investing in on-shore hedge funds.
Explain the role of financial intermediaries in the flow funds through the three sector economy?
In a three-sector economy consisting of business, households, and government, financial intermediaries such as commercial banks, mutual saving banks, insurance companies, mutual funds, pension funds, and credit unions provide the mechanism for reallocating funds from one surplus sector to a deficit sector. These institutions indirectly invest excess funds in areas of the economy where funds are needed.
Duties and responsibilities client liaison manager?
liaison manage ensures effective communication and cooperation between two entities. He carries out supervisory duties to the organization and ensures co ordination between the organization he works for and its clients and partners. A liaison manager is a good communicator and should be friendly and level headed. He must be knowledgeable about the business area his organization deals with.
