...23 1. Mutual funds are attractive to small investors because they are able to diversify their portfolio for a minimum investment of $250 to $2,500 (p. 609). The investors must rely on the fund’s portfolio manager to make the investment decisions though. Mutual funds generate returns in three ways: through dividend payments to shareholders, distribute capital gains resulting from the sale of securities within the fund, and through mutual fund share price appreciation (p. 611). 2. Open-end mutual funds differ in the fact that they are open to investors which means they will sell shares to investors at any time (p. 609). They also allow investors to sell the shares back to the fund at any time which closed-end cannot (p. 609). 3. Load funds are promoted by registered representatives of brokerage firm, who earn a sales charge upon the investments in the fund between 3 and 8.5 percent (p. 615). No-load funds are promoted strictly by the mutual fund of concern, thereby avoiding an intermediary (p.615). 6. The ideal mutual fund for investors who wish to generate tax-free income and a low degree of risk would be a short-term municipal bond fund (p.620). 9. If the mutual fund distributes at least 90 percent of its income to its shareholders, the fund itself is exempt from federal taxation (p.625). 11. Money market funds differ from other types of mutual funds based on the composition, maturity, and risk of their assets (p. 625). The most common money market funds are commercial...
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...The Mutual Fund At a basic level, mutual funds are nothing more than a collection of stocks and bonds. A mutual fund primarily focuses on bringing groups of people together to invest their money into bonds, stocks, and other different securities. It’s important to know that each of these gathered investors owns shares that ultimately make up a portion of the holdings in the total fund. Once a person invests into these stocks, bonds, or securities through the mutual fund they can make money in three different ways. One being if the fund sells a security that increases in price then it has a capital gain. If a capital gain occurs then most funds forward these gains to investors in a distribution. Another way investors make money through mutual funds is if fund holdings’ price rises but is not sold by the fund manager. The fund’s shares increase and one can sell their mutual fund shares for a profit. The third way an investor can make a profit is when income is earned from the interest on bonds and from the dividend on stocks. The fund pays out almost all of the income it receives throughout the year to fund owners in a distribution. Mutual funds not only have great benefits on a profitable level but also have many other perks to them. Most importantly, mutual funds provide professional management of the investors’ money. Most investors purchase funds because they either don’t have the time or the expertise to thoroughly manage their own portfolios. This is a great way for...
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...The Definition A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund. You can make money from a mutual fund in three ways: 1) Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all of the income it receives over the year to fund owners in the form of a distribution. 2) If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution. 3) If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares. Advantages of Mutual Funds • Professional Management - The primary advantage of funds is the professional management of your money. Investors purchase funds because they do not have the time or the expertise to manage their own portfolios. A mutual fund is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor investments. • Diversification - By owning shares in a mutual fund instead of owning individual stocks or bonds...
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...Hedge Funds Have Enough Capital? A Value-at-Risk Approach * Anurag Gupta† Bing Liang‡ April 2004 ____________________________________ *We thank Stephen Brown, Sanjiv Das, Will Goetzmann, David Hseih, Kasturi Rangan, Peter Ritchken, Bill Sharpe, Ajai Singh, Jack Treynor, and two anonymous referees for comments and suggestions on earlier drafts, and the seminar participants at Case Western Reserve University, University of Massachusetts at Amherst, Virginia Tech., the 2003 European Finance Association Meetings in Glasgow, the 2003 Western Finance Association Meetings in Los Cabos, the 2003 QGroup fall seminar in Scottsdale, the 2001 FMA European Meetings in Paris, and the 2001 FMA meetings in Toronto. Bing Liang acknowledges a summer research grant from the Weatherhead School of Management, Case Western Reserve University. We also thank TASS Management Limited for providing the data. We remain responsible for all errors. †Department of Banking and Finance, Weatherhead School of Management, Case Western Reserve University, Cleveland, OH 44106. Phone: (216) 368-2938, Fax: (216) 368-6249, E-mail: anurag.gupta@case.edu. ‡Department of Finance and Operations Management, Isenberg School of Management, University of Massachusetts, Amherst, MA 01003. Phone: (413) 545-3180, Fax: (413) 545-3858, E-mail: bliang@som.umass.edu. Do Hedge Funds Have Enough Capital? A Value-at-Risk Approach Abstract We examine the risk characteristics and capital adequacy of hedge funds through...
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...Cayman Islands Guide to Hedge Funds Introduction From offices in the British Virgin Islands, the Cayman Islands, Dubai, Dublin, Hong Kong, Jersey, London and Singapore, Walkers provides legal services to FORTUNE 100 and FTSE 100 global corporations and financial institutions, capital markets participants, investment fund managers and middle market companies. Walkers' Cayman office has an international reputation as the leading hedge fund and private equity fund practice in the Cayman Islands, advising the best-known asset managers, promoters and institutional investors in the investment world for five decades. Our global presence means we are always open and accessible to our clients – in all time zones. The purpose of this Guide is to offer a comprehensive, commercial and concise guide to the key aspects of structuring and establishing an offshore hedge fund – starting with a broad overview of hedge fund structures, and concluding with a short section on listing. We have also addressed some of the defensive mechanisms that can be deployed to stabilise a hedge fund in difficult times, including a section on the use of synthetic side pockets and side letters. The Guide is not a substitute for seeking appropriate onshore and offshore commercial and legal advice and should not be relied on in this manner. Introduction to hedge fund vehicles The key constitutional features of hedge funds to address from an offshore perspective are three-fold: 1. 2. 3. the types of vehicle used;...
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... Background of the study: Mutual fund industry in India attaining maturity Even though the capital market attracts people there are several problems associated with it. While investing directly in to capital market one to be careful to judge the valuation of the stock and understand the complexities involved in the stock price fluctuations. So, a person with moderate knowledge of capital market generally prefers to invest in mutual funds. In recent times mutual fund industry in India is growing rapidly and is undergoing tremendous changes. The Indian mutual fund industry has witnessed several structural and regulatory reforms. Different Investment Avenue are available to investors. Mutual fund also offers good investment opportunities to the investors. Like all investment, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts and consultants including agents and distributors of mutual funds schemes while investment decisions. An objective to make the investors aware of functioning of mutual funds, an attempt has been made to provide information in question-answers format which may help the investors in taking investment decisions. Meaning of mutual fund: Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives...
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...AGGRESSIVE FUNDS There has been significant research in the area Aggressive funds and the effects. Few of them are enumerated as follows. • Kate Burgess(2006) in her independent study of shareholder activism has founded out that investment funds that aggressively push for change at companies substantially outperform stock market indices. • Dave Ramsey suggests that if you've been saving money, trying to get out of debt, investing in mutual funds. • Dave Ramsey urges investors to hold 4 mutual funds in their one Growth fund, one Growth & Income fund, one Aggressive Growth fund and one International fund. • Fidelity.com has given 3 tips for the investors suggesting ways to invest in Aggressive Funds. People who are young for Example in their 20’s and 30’s can invest in Aggressive Funds. This is because they can handle any loss if made because they will be earning in their entire life ahead. People who are in 50’s wont be willing to take much risk as they will be looking for security at the end of their working years and are looking for retirement. Young people are dynamic, enthusiastic and willing to take funds. The second tip it gives is that invest more when you are earning as the benefits will be compounding. The third tip it gives is that you need to make a strategy while investing. Take help from the rating firms to know about the rating of the stocks and their growth and the return and risk involved. • Upgrader funds.com (2011) has given 6 advises for investing...
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...ReseaRch PaPeR Commerce Volume : 3 | Issue : 1 | January 2013 | ISSN - 2249-555X A Study About Awareness of Mutual Funds Among the Investors of Navsari District Keywords Mutual Funds, Investment alternatives, Investors’ perception. Dr. M. P. Desai Head, Department of Accountancy,Udhna Citizen Commerce College, Surat. Residence: 50,Niral Nivas, Ashapuri society,Vijalpore road, Navsari,396445, Gujarat. Mr. Mayur K Joshi Asst. Prof., Department of Accountancy,Udhna Citizen Commerce College, Surat. Residence: Vinay readymade, 7, shopping center,Dudhiya talav, Navsari,396445, Gujarat. ABSTRACT The financial securities include ownership securities (like shares, mutual fund units) and creditorship securities (like debentures, bonds). Ownership securities are more risky than creditorship securities. Investment decisions relating to ownership securities involve planning of investment strategies according to the extent of diversification desired by individuals. Investors can reduce risk and maximize returns by way of mutual fund investments, enjoying the expertise of professional fund management. In India, Mutual fund industry is an organised financial system, accessible to individual investors having varied needs and options. In order to identify awareness of mutual funds among the investors of Navsari District, a careful collection of primary data through questionnaire was made. Introduction Financial system comprises financial institutions, services, market and...
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...Mutual funds: The first mutual funds were established in Europe. One researcher credits a Dutch merchant with creating the first mutual fund in 1774.[5] The first mutual fund outside the Netherlands was the Foreign & Colonial Government Trust, which was established in London in 1868. It is now the Foreign & Colonial Investment Trust and trades on the London stock exchange.[6] Mutual funds were introduced into the United States in the 1890s.[7] They became popular during the 1920s. These early funds were generally of the closed-end type with a fixed number of shares which often traded at prices above the value of the portfolio.[8] The first open-end mutual fund with redeemable shares was established on March 21, 1924. This fund, the Massachusetts Investors Trust, is now part of the MFS family of funds. However, closed-end funds remained more popular than open-end funds throughout the 1920s. By 1929, open-end funds accounted for only 5% of the industry's $27 billion in total assets.[9] After the stock market crash of 1929, Congress passed a series of acts regulating the securities markets in general and mutual funds in particular. The Securities Act of 1933 requires that all investments sold to the public, including mutual funds, be registered with the Securities and Exchange Commission and that they provide prospective investors with a prospectus that discloses essential facts about the investment. The Securities and Exchange Act of 1934 requires that issuers of securities...
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...CHAPTER 1 INTRODUCTION INTRODUCTION Much of the empirical research on mutual funds has not given any significant contribution for the mutual fund investor. Unfortunately many mutual fund investor have probably never heard about these research results or their implications. They have heard some rules of thumb guidelines from their brokers or peers about how to select a particular fund. The purpose of this present study is to identify the selection criteria, investors seem to use in selecting a mutual fund institution that suits the investors investment objective and also to identify the factors that are responsible for the selection of schemes floated by these organisations. Further it attempts to identify the reactions from the respondents' namely mutual fund unit holders of Mysore towards the performance of the different schemes. The researcher has employed interview schedule for the collection of data to elicit views of the Mutual Fund investors. Individuals from all walks of life have been showing increasing participation in the stock market, a place where one can see their money doubling in a period of time or disappearing depending on how they play the game. With the stupendous growth in the capital market, direct investment in the stock market has definitely become next to impossible. And yet investors undertake investments with minimal risks of the working of stock exchanges. But in order that investments prove profitable; investors...
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...Article: What are the most popular mutual funds that invest primarily in the insurance sector? Website: Investopedia Link : http://www.investopedia.com/ask/answers/051915/what-are-most-popular-mutual-funds-invest-primarily-insurance-sector.asp This is an article about 3 popular mutual funds that invest in insurance sector. Why would they target insurance sector? As per the article the insurance sector is predicted to grow in few years. There is an expectation that in future interest rates are going to go up and that would strength financial services industry. So there is an opportunity if you wish to grow your money. One of the 3 mutual funds is Fidelity Select Insurance Portfolio. This portfolio invest minimum of 80% of its assets in equity securities of companies operating in insurance business. The 2nd fund is T. Rowe Price Financial Services Fund; it invests in common shares of companies operating within financial service industry. This will grow your assets through long term capital appreciation and making income through yearly dividends. The 3rd one is John Hancock Financial Industries fund which invest same like T. Rowe Price Financial services funds invest into, in equity securities. Not like Fidelity funds, these funds are diversified among foreign and domestic companies. However it carries 1.29% expense ratio. | Fidelity ..funds | T. Rowe..funds | John Hancock.. funds | Over years | 11.3% | 9.5% | 2% | Over 3 years | 19.5% | 17.8% | 16.9% | Over 5 years...
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...Title: A Hedge Fund manager’s New Groove Date: November 2, 2010 Section: Money and Investing methodology According to the Wall Street’s journal article, a former manager of hedge funds has made a lot of money by switching to the high long term decision from his shorting stock. William Von Mueffling made a surprising announcement by saying that he would close his hedge funds and return about $3.5 billion to investors. Williams Muefflling’s firm contillion capital management of New York only managed an unattractive piece of business of business worth $1 billion in long only assets for a very long period of time. Due to his fortune he currently manages more money than he did while he was a hedge fund manager. According to the article, the former hedge funds manager has raised billions of dollars in the U.S financial market and foreign financial markets from pension funds investment. His investments saw 21% returns increase this year which has helped to boost his overall assets to about $5 billion. Contillion capital management is now a firm that charges lower fees with attended process of investment. William Von Mueffling and his other financial analyst now choose to invest and stick to the company’s stocks that they believe will grow rather than betting against stocks. According to the former, hedge funds manager, he says that this is the right long term decision which he just made. He believes that although there are some stocks which are overvalued, trying to short term...
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...MUTUAL FUND A Mutual fund is a pool of money, collected from investors and is invested according to certain investment objectives. A Mutual fund is created when investors put their money together. It is therefore a pool of the investor’s funds. The most important characteristic of the Mutual fund is that the contributories and the beneficiaries are the same class of people, namely the investors. The term mutual means that the investors contribute to the pool, and also benefit from the pool. There are no other claimants to the funds. The pool of funds held mutually by investors is the mutual fund. A Mutual fund business is to invest the funds thus collected, according to the wishes of the investors who created the pool. Usually the investors appoint professional investment managers, to manage their funds. The same objective is achieved when professional investment managers create a ‘product’ and offer it for investments to the investors. The product represents a share in the pool and pre states investment objectives. FEATURES AND CHARACTERISTICS OF MUTUAL FUND A mutual fund is a financial intermediary and works as an investment company. It has distinct features and characteristics which differentiate it from other financial intermediaries. Some of the features of mutual fund are: Mutual fund is a pool of financial resources. Investors bring their individual funds together. Sometimes the funds which otherwise may not come for investment in the capital...
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...Visit www.mbahotspot.com for more PROJECT REPORT ON Mutual Fund Industry In India BY MBAHOTSPOT.COM Brought to you by [www.mbahotspot.com] Visit www.MBAhotspot.com for more projects THIIS PROJECT IS MADE BY TEAM OF MBAHOTSPOT.COM, FOR YOUR COSTOM PROJECT YOU CAN MAIL US AT info@mbahotspot.com or mbahotspot@gmail.com we will make available for you. For your personalize project report emails us at: info@mbahotspot.com or mbahotspot@gmail.com 1 Visit www.mbahotspot.com for more For your personalize project report emails us at: info@mbahotspot.com or mbahotspot@gmail.com 2 Visit www.mbahotspot.com for more INTRODUCTION OF MUTUAL FUNDS Mutual funds have become a very popular way to take some of the risk out of investing in individual stocks by investors. Mutual funds are a collection of stocks selected by mutual fund seller and sold to investors as shares in a fund. There are several types of funds that you can invest in. Some of the more popular types are technology funds, growth funds, security funds, and income funds. Mutual funds are very popular because they allow you to invest in a numbers of stocks therefore greatly reducing the risks associated with putting you money in an individual stock. Mutual funds have become one of the most attractive ways for the average person to invest their money. A mutual fund pools resources from thousands of investors and then diversifies its investment into many different holdings such as stocks, bonds, or...
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...Hedge Funds Instructor: Dr. F. Beer By: Vishal Pahuja | Angel Cardoz | Contents Introduction by Vishal Pahuja 3 History by Vishal Pahuja 4 Types of Hedge Funds by Vishal Pahuja 4 Key Characteristics of a Hedge Funds by Vishal Pahuja 5 Size and Market Statistics by Angel Cardoz 5 What is the Cost? by Angel Cardoz 6 Cost to manage 6 Cost to Economy 7 Risks and Returns by Vishal Pahuja 7 Hedge Fund Structure by Vishal Pahuja 8 A Success Story by Vishal Pahuja 9 Peer Evaluation 9 Pay for Hedge Fund Managers 9 A Failure Story by Angel Cardoz 10 Long-Term Capital Management 10 The Rise 10 The fall 10 The future of hedge funds by Angel Cardoz 11 Regulation 11 Markets 11 Bibliography by Vishal Pahuja 11 Quote Basically, I look at the trading screens all day and go with my gut. Hedge Funds Introduction S ince the early 1990s, hedge funds have become an increasingly popular asset class. The amount invested globally in hedge funds rose from approximately $50 billion in 1990 to approximately $1 trillion by the end of 2004 And because these funds characteristically use substantial leverage, they play a far more important role in the global securities markets than the size of their net assets indicates. Market makers on the floor of the NYSE have estimated that during 2004, trades by hedge funds often accounted for more than half of the total daily number of shares changing hands. Moreover, investments in hedge funds have become...
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