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Financial Transactions with Mutual Funds (Purchase, Redemption and Switches)
Financial Transactions with Mutual Funds: Generally involve three main types: Purchase, Redemption, and Switches. Purchase: Buying units of a mutual fund scheme. Types of Purchase Plans: Lumpsum Investment: Investing a one-time large sum. SIP (Systemati...
KYC Requirement for Mutual Fund Investors- Marketing of Mutual Fund Products
Documents Required for KYC (Know Your Customer): Proof of Identity (Any one of the following): PAN Card (Mandatory for all mutual fund investors) Aadhaar Card Passport Voter's ID Driving License Proof of Address Photograph Marketing of Mutual Fund ...
Fair Valuation Principles -Dividends & Distributable
Fair Valuation Principles Fair Value: Definition: The price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction (not a forced sale) between market participants (market-based view) at the measurement ...
Entry and Exit Load and its Impact on NAV- Computation of Total Expense ratio
Entry and Exit Load and its Impact on NAV Entry / Exit Load: Entry Load: (Note: Entry loads are currently prohibited in India by SEBI. However, for historical context and understanding) In the past, an entry load was a fee charged when an investor purchased...
Pricing of Units for Segregated Portfolio
Segregated Portfolio (Side Pocket): Purpose: A segregated portfolio (also known as a side pocket) is created to separate distressed or illiquid assets from the main portfolio of a mutual fund scheme. This is done to protect investors from the negative impact...
Calculation of NAV, Fact Sheet Analysis
Calculation of NAV (Net Asset Value) Definition: NAV represents the per-unit market value of a mutual fund scheme's portfolio. It is the price at which investors buy or redeem units after the NFO period. Formula for NAV: NAV = (Total Assets - Total Liabili...
General and Specific Risk Factors
Risk Factors Affecting Mutual Fund Performance Mutual Funds and Risk Factors: Subject to Risks: Mutual funds are subjected to various risk factors that can impact their performance. 1) General Risk Factors: Definition: These risks affect the overall finan...
Factors that affect mutual fund performance-Drivers of Returns and Risk in mutual fund Scheme
Factors Affecting Mutual Fund Performance: 1. Economic Factors Inflation & Interest Rates: High inflation can erode real returns, while rising interest rates can negatively impact debt funds. GDP Growth & Economic Cycles: Strong economic growth generally be...
The benchmark for some of the mutual fund schemes- Scheme Selection based on Investor needs, preferences, and risk-profile
Benchmark for Mutual Fund Schemes: Definition: A benchmark index is a standard against which the performance of a mutual fund scheme is compared. It represents the market or segment that the fund aims to invest in. Purpose of Benchmarking: Performance Eva...
Performance indicators – Sharpe, Jensen and Treynor, SIP – Taxation on Mutual Fund
Performance Indicators – Sharpe, Jensen, and Treynor Ratios Portfolio Performance Measures: Key Factor in Investment Decisions: Portfolio performance measures are key factors in the investment decision process. Popular Performance Measurement Tools: Sharp...
Role of Regulators in India, Role of Securities and Exchange Board of India
Role of Regulators in India: Crucial Role: Regulators in India play a crucial role in ensuring the stability, transparency, and efficiency across different sectors of the economy. Policy and Enforcement: They establish policies, enforce laws, and protect t...
Due Diligence Process by AMCs for Distributors of Mutual Funds, , Investor Grievance Redress Mechanism
Due Diligence Process by AMCs for Distributors of Mutual Funds: Importance of Distributor Due Diligence: Asset Management Companies (AMCs) undertake due diligence on distributors to ensure they are suitable, qualified, and act in the best interests of invest...
AMFI Code of Conduct for Intermediaries
AMFI Code of Conduct for Intermediaries: Purpose of the Code: The AMFI (Association of Mutual Funds in India) Code of Conduct for Intermediaries sets out ethical standards and best practices for distributors and other intermediaries involved in the distribut...
SEBI and AMFI Guidelines for Mutual Funds
1. SEBI Guidelines for Mutual Funds The Securities and Exchange Board of India (SEBI) is the regulatory authority overseeing mutual funds in India. SEBI's guidelines ensure transparency, investor protection, and the smooth functioning of mutual funds. 1.1 Regi...