How does Mutual Fund Manager Overconfidence Impact Mutual Fund
Jsn Mutual Fund Power Point
-
Upload
satyanarayana-yadav -
Category
Documents
-
view
225 -
download
0
Transcript of Jsn Mutual Fund Power Point
-
8/2/2019 Jsn Mutual Fund Power Point
1/31
-
8/2/2019 Jsn Mutual Fund Power Point
2/31
Mutual fund is a fund managed by investmentcompany with an financial objective ofgenerating high rate of returns.
These investment companies combines thefunds of many individual investors havingsimilar investment objective.
These companies collects money frominvestors and invests those money indifferent stocks, bonds and other financialsecurities in a diversified manner.
-
8/2/2019 Jsn Mutual Fund Power Point
3/31
Before investing they carryout thorough
research and detailed analysis on themarket conditions and market trends of
stock and bond prices.
The entire income/profits aredistributed to the investors in
proportion to their investments.
-
8/2/2019 Jsn Mutual Fund Power Point
4/31
The phases as follows..
The foundation for the mutualfund operation in India was
laid by parliament in 1963with an enactment of UTI.
-
8/2/2019 Jsn Mutual Fund Power Point
5/31
+UTI was setup by RBI & functioned undercontrol of RBI.
+In 1978 UTI was delinked by RBI, IDBI took
over the regulatory and control of UTI.
-
8/2/2019 Jsn Mutual Fund Power Point
6/31
Broadening of industry :
Entry of Commercial banks & public sector financialinstitutions.
SBI Mutual Funds is a first Non- UTI Mutualfund Established in June 1987
-
8/2/2019 Jsn Mutual Fund Power Point
7/31
NAME OF THE COMMERCIAL
BANK/INSTITUTION
YEAR
SBICanara Bank
LICGICIndian Bank
Bank of IndiaP.N.B
19871987
19891991199019901990
NOTE:-
TOTAL ASSETS OF INDUSTRY GREW ABOUT 61,000 crores.
-
8/2/2019 Jsn Mutual Fund Power Point
8/31
Kothari pioneer was the first private sectormutual fund which was established in July1993.
International players like MORAGALSTANLEY ,J.P.MORGAN ,CAPITALINTERNATIONAL etc., followed.
The total assets is worth 1,21,805 crores.
-
8/2/2019 Jsn Mutual Fund Power Point
9/31
UTI Act 1963 bifurcated into two separateentities in Feb 2003 .
+ One is specified undertaking of UTI with the
assets of rupees 29,835 crores.- functioned under rules framed by
Govt.of.India.
-Does not comes under mutual fundregulations.
-
8/2/2019 Jsn Mutual Fund Power Point
10/31
+ The second is the UTI Mutual fund Ltd with
the assets of 76000 crores.
- Sponsored by SBI,PNB,BOB & LIC.
- Registered with SEBI.
- Functions under mutual fund Regulations.
-
8/2/2019 Jsn Mutual Fund Power Point
11/31
The graph indicates the growth of assets over the years:
-
8/2/2019 Jsn Mutual Fund Power Point
12/31
-
8/2/2019 Jsn Mutual Fund Power Point
13/31
-
8/2/2019 Jsn Mutual Fund Power Point
14/31
Sponsor is basically a promoter of the fund. For e.g., BOB,PNB,SBI,LIC are the sponsors of
UTI Mutual Funds.
HDFC & Standard Life Investments Limited are
the sponsors of HDFC mutual funds. The fund sponsor raises money from public, who become
fund shareholders.
The pooled money is invested in the securities.
Sponsor appoints trustees.
SPONSOR
-
8/2/2019 Jsn Mutual Fund Power Point
15/31
Two third of the trustees are independent professionals
who own the fund and supervises the activities of the
AMC.
It has the authority to sack AMC employees for non-
adherence to the rules of the regulator.
It safeguards the interests of the investors.
They are legally appointed i.e. approved by SEBI
-
8/2/2019 Jsn Mutual Fund Power Point
16/31
Asset Management Company (AMC) is a set of
financial professionals who manage the fund.
It takes decisions on when and where to invest the
money. It doesnt own the money.
AMC is only a fee-for-service provider.
NOTE:The above 3 tier structure of Indian mutual funds is
very strong and virtually no chance for fraud.
-
8/2/2019 Jsn Mutual Fund Power Point
17/31
A Custodian keeps safe custody of the investments (related
documents of securities invested).
A custodian should be a registered entity with SEBI.
If the promoter holds 50% voting rights in the custodian
company it cant be appointed as custodian for the fund.
This is to avoid influence of the promoter on the custodian.
It may also provide fund accounting services and transfer
agent services.
JP Morgan Chase is one of the leading custodians.
-
8/2/2019 Jsn Mutual Fund Power Point
18/31
Transfer Agent Company interfaces with the customers,
issue a funds units, help investors while redeeming
units.
Provides balance statements and fund performance
fact sheets to the investors.
CAMS is a leading Transfer Agent in India.
-
8/2/2019 Jsn Mutual Fund Power Point
19/31
CLASSIFICAITON OF MUTUAL
FUNDS
OPERATIONAL CLASSIFICATION
PORTFOLIO CLASSIFICATION
GEOGRAPGICAL CLASSIFICATION
STRUCTURAL CLASSIFICATION
-
8/2/2019 Jsn Mutual Fund Power Point
20/31
OPERATIONAL CLASSIFICATION
oOpen-End Mutual Funds
oClose-End Mutual Funds
oInterval Funds
-
8/2/2019 Jsn Mutual Fund Power Point
21/31
PORTFOLIO CLASSIFICATIONGrowth Oriented Funds/Equity Oriented Funds
Income / Debt-Oriented Funds
Balanced Funds/ Income and Growth Oriented
FundsBond Funds
Stock Funds
Index FundsIndustry Funds
Tax Relief Funds
Leveraged Funds
Cont
-
8/2/2019 Jsn Mutual Fund Power Point
22/31
Real Estate FundsMoney Market Mutual Funds
Asset Management Mutual Funds
Liquid Funds
Gilt Funds
Load / Non-Load Fund
Systematic Investment Plan (SIP)
Retirement Pension Plan
Insurance Plan
-
8/2/2019 Jsn Mutual Fund Power Point
23/31
GEOGRAPHICAL CLASSIFICATION
DOMESTIC MUTUAL FUNDS
OFF-SHORE MUTUAL FUNDS
-
8/2/2019 Jsn Mutual Fund Power Point
24/31
ADVANTAGES OF MUTUAL FUNDS:
Professional Management
Diversification
Convenience
Return Potential
Tax Benefits
Govt.Regulations
-
8/2/2019 Jsn Mutual Fund Power Point
25/31
Other Advantages Of Mutual Funds
Low cost
LiquiditySafety
Transparency
-
8/2/2019 Jsn Mutual Fund Power Point
26/31
DISADVANTAGES OF MUTUAL
FUNDS
No control over costsNo tailor-made portfolios
Managing a portfolio of funds
Delay in redemption
-
8/2/2019 Jsn Mutual Fund Power Point
27/31
MARKET RISKS
NON-MARKETINFG RISKS
INTERST RATE RISK
CREDIT RISK
-
8/2/2019 Jsn Mutual Fund Power Point
28/31
- Markets fall on account of macro economicfactors.
MARKET RISK:
NON-MARKET RISK:
- Bad news about an individual company can pull down
its stock price.INTERST RATE RISK:
-when the interest rate falls bond prices falls this effectsthe NAV Negatively
CREDIT RISK:-when funds invested the bonds there is a risk of the
corporate defaulting on their interest payments and principlepayments obligations.
C C O
-
8/2/2019 Jsn Mutual Fund Power Point
29/31
EFFICIENCY OF MUTUAL
FUNDS
Efficiency of a mutual funds can be judged bythe following
Stability
Liquidity
Growth
Credibility of issuer
returns
Management Approach
-
8/2/2019 Jsn Mutual Fund Power Point
30/31
-
8/2/2019 Jsn Mutual Fund Power Point
31/31