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PRESENTED BY: Anto Sebastian Divya Antony Anjali V Mohan Jeff AC Akshara Peter
Mutual Fund
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Structure of a Fund
Sponsor: Akin to the Promoter of the company. Contribute min 40% of net worth of AMC. Establishes the Fund, Gets it registered with the SEBI. Forms a trust, & appoints Board of trustee. Trustees: Holds assets on behalf of unit holders intrust. Two third of the trustees shall be independent persons . Trustees ensure that the system, processes & personnel are in place.
Asset Management Company: Floats schemes & manages according to SEBI. Can not undertake any other business activity, other than portfolio management services. At least 50% of independent directors. Depository: Facilitates financial transactions, Provides remittance facilities. Registrar & Transfer Agent: Maintains records of unit holders accounts& transactions Disburses & receives funds from unit holder transactions. Custodian: Holds the funds securities in safekeeping. Collects interest & dividends paid on securities. Settles securities transaction for the fund.
Types of Returns
Income is earned from dividends on stocks and interest on bonds. If the fund sells securities that have increased in price,
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