...invest in index-tracker funds rather than actively-managed funds? Topic 2 : Should retail investors invest in index-tracker funds rather than actively-managed funds In recent years, investment has been interested by the majority of people more than in the past as basically everyone would like generate income and try to find the ways that can actually make money. Not only do investors need to know more knowledge that how to make money investing, but also they have to update news which has information about money’s movement. Moreover, the majority of investors is supposed to follow international news and monitor that show their money in real time. In today’s world, there are many capital markets for investing because if the number of investors increases, it will make the number of investment products in the capital market increased. Thus, investors in these days are supposed to have the way in order to choose which stock will make them make the most investment return. Then, there are two investing’s types in funds for retail investors in order to invest between index- tracker funds and actively- managed funds and most investors are supposed to understand and know which one they have to use. This essay will be discussed investing in index-tracker funds and actively-managed funds that follow by pros and cons, and also provide knowledge that why are retail investors supposed to put their money in index-tracker funds rather than in actively-managed funds. First and foremost...
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...5923/j.ijfa.20130207.04 Role of Pension Funds in Financial Intermediation Ondabu Ibrahim Tirimba Finance and Economics Department, PhD Candidate Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya Abstract This paper aimed at discussing the various roles that pensions play in financial intermediat ion. Descriptive research design was adopted with the population being all the available literature on the online web as pertaining pension funds and also financial intermed iation. Using key word characters, the search in itially identified 50 journals and after a tentative scrutiny, 37 journals were selected in a random sampling manner in o rder to give the birth of this discussion paper. The key objective of this article was to discuss the role of pension funds in financial intermed iation. A mong the roles identified in this paper were; provision of a mechanis m for pooling of funds and subdivision of shares, provision of ways to transfer economic resources, provision of ways to manage uncertainty and control risk, provision of ways to manage uncertainty and control risk, provision of pricing informat ion and the provision of ways to deal with incentive problems. This paper provides practical insights into the roles of pension in financial intermed iation and thus highlighting the key importance of such pension funds into the success of any economy. This paper is one of the very first to recognize the key roles that pension funds play in the 21st century. Keywords...
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...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 small...
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...Topic: - Mutual Funds In India Team: - Group No. 3 * 10B910 – Siddhesh Goad * 10B913 – Chetan Gupta * 10B914 – Romit Gupta * 10B915 – Fahad Hussian Index: - Sr. No. | Topic | Page No. | 1. | History of Mutual Funds in India | 5 , 6 | 2. | Objective / Aim | 7 | 3. | Basic of Mutual Funds | 8 | 4. | Working of Mutual Funds | 9 , 10 , 11 | 5. | What is Mutual Fund? | 12 | 6. | Diversification | 13 | 7. | Types of Mutual Funds | 14 , 15 , 16 | 8. | Various other Mutual Fund Schemes: - | 17 , 18 , 19 , 20 | 9. | Types of Returns | 21 , 22 | 10. | Advantages of Investing in Mutual Funds | 23 | 11. | Disadvantages of Investing in Mutual Funds | 24 | 12. | Conclusion | 25 | 13. | Bibliography | 26 | History of Mutual Funds in India: - * The first mutual fund to be introduced in India was way back in 1963 when the Government of India launched Unit Trust of India (UTI). * UTI enjoyed a monopoly in the Indian mutual fund market till 1987 when a host of other government controlled Indian financial companies came up with their own funds. * These included State Bank of India, Canara Bank, Punjab National Bank etc. * This market was made open to private players in 1993 after the historic constitutional amendments brought forward by the then Congress led government under the existing regime of Liberalization, Privatization and Globalization (LPG). * The first private sector fund to operate in India...
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...1.1. Introduction Mutual Funds in India – History The concept of Mutual Funds in India emerged as success as early as 1990s, when Government allowed public sector banks and institutions to launch mutual funds schemes. Unit Trust of India was the first Mutual Fund in India set-up in the year 1963 Security and exchange Board of India (SEBI) act was passed in the year 1192. The objectives of SEBI are - to regulate security market and protect the interests of investor community. It is regulatory institution which is responsible for formulating policies and guidelines for operation of mutual funds in India. Mutual funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. More than 80 million people, or one half of the households in America, invest in mutual funds. In fact, many people think investing means buying mutual funds. After all, its common knowledge that investing in mutual funds is (or at least should be) better than simply letting your cash waste away in a savings account, but, for most people, that's where the understanding of funds ends. It doesn't help that mutual fund salespeople speak a strange language that is interspersed with jargon that many investors don't understand. Originally, mutual funds were heralded as a way for the little guy to get a piece of the market. Instead of spending all your free time buried in the financial pages of the Wall Street Journal...
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...United Way and the Boy Scout of America 1. The circumstances involving the Boy Scouts of America situation affects everyone that is a part of them and the United Way program. Larry Norvell is the local head of the United Way of Columbia-Willamette and he represents the larger company. He has to make decisions that affect all of United Way and the Boy Scouts of America. He operates a business and needs to handle this situation as a business decision and focus on the bottom line. Sometimes as a business owner you have to look at the pros and cons in any situation. Also, there will be a sacrifice made on either decision he makes. He consulted many people, but ultimately he has to decide what’s best for his organization. United Way is an organization made up of volunteers, contributors, and local charities to help people in their own communities. Larry Norvell is part of an organization that creates a work experience that is fair for all employees. The bottom line is looking beyond the immediate situation and the consequences that his decision will make on everyone. If Larry agrees with the BSA, then United Way will lose contributions from companies. If Larry disagrees with the BSA, then Boy Scouts of America will lose funding. Larry has to make a stance, if he doesn’t then this situation will come back and affect his organization. Society is changing; Larry needs to change policies in order to overcome this bad situation that has arisen. Discrimination has been a...
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...Investment Banking and Venture Capital Assignment No:-2 Regulation of Venture Capital By SEBI - What is Venture Capital? Venture Capital financing is a process whereby funds are pooled in for a period of around 10 years and investing it in venture capital undertakings for a period of 3 to 5 years with an expectation of high returns. To protect the funds of the investors against the risk of losses, venture capital fund provides its expertise, undertake advisory function. Venture Capital financing had been a popular source of funding in many countries and served as a lucrative bait to create a similar industry in India as well. Regulations of Venture Capital: VCF are regulated by the SEBI (Venture Capital Fund) Regulations, 1996. The regulation clearly states that any company or trust proposing to carry on activity of a VCF shall get a grant of certificate from SEBI. Section 12 (1B) of the SEBI Act also makes it mandatory for every domestic VCF to obtain certificate of registration from SEBI in accordance with the regulations. Hence there is no way that an Indian Venture Capital Fund can exist outside SEBI Regulations. However registration of Foreign Venture Capital Investors (FVCI) is not mandatory under the FVCI regulations. A VCF and registered FVCI enjoy several benefits: • No prior approval required from the Foreign Investment Promotion Board (FIPB) for making investments into Indian Venture Capital Undertakings (VCUs). • As...
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...the variety of funds the city uses and accounting practices for those funds as well as anomalies that arise from reviewing the report. In addition five relevant ratios will be used to assist in summarizing the financial condition of the city. The major governmental funds used by the city include the General Fund, the Motor Fuel Tax Fund, and the State and Federal Grants Funds. The Motor Fuel Tax Fund is used for projects financed by the Motor Fuel Tax which is assembled and dispersed by the State of Illinois. The State and Federal Grants funds are financed by grants from state and federal governments and are used to support community development and housing. Although this may seem understandable, there is no mention in the report of what “community development” actually means. What is known, however, is that these grants are legally restricted to specific uses. The General Fund accounts for all revenues and expenses not allocated specifically to other funds. Governmental funds not considered major include Special Revenue Fund, Capital Project Fund, Debt Service Fund, and Permanent Funds. The name of the Permanent Fund does not in any way describe what it is for, but notes to the financial statements indicate that it accounts for the City’s revolving loan funds. Besides the Governmental Funds the city also maintains Proprietary Funds and Fiduciary Funds. Types of Proprietary Funds include the Enterprise Funds which consist of the Water Fund, Sewer Fund, and Quincy Regional...
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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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...INDEX FUNDS.. FM n FS PROJECT Active and Passive Management Before we get into the details of index funds, it's important to understand the two different styles of mutual-fund management: passive and active. Most mutual funds fit under the active management category. Active management involves the art of stock picking and market timing. This means the fund manager will put his/her skills to the test trying to pick securities that will perform better than the market. Because actively managed funds require more hands-on research and because they experience a higher volume of trading, their expenses are higher. Passively managed funds, on the other hand, do not attempt to beat the market. A passive strategy instead seeks to match the risk and return of the stock market or a segment of it. You can think of passive management as the buy-and-hold approach to money management. Defn- An index fund a collective investment scheme that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market condition. An index fund is a mutual fund which merely invests in the securities in the index. It is passive, in the sense that absolutely no effort is made to produce results better than the index. HISTORY: Index funds haven't been around forever -- how did they come about? Long ago, there was a student at the University of Chicago who studied modern ideas of finance taught...
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...The Duties & Functions of Fund Managers By Thomas James, eHow Contributor A fund manager is an individual who manages a large quantity of investments on behalf of many other individuals and institutions. Another name for a fund manager is an investment manager or investment advisor. The investments a fund manager may manage include bonds, shares in companies, real estate and even holdings in other investment funds. The term "fund manager" can also refer to an institution that manages funds, as well as an individual fund manager. Wealth Protection • The most important duty of a fund manager is to ensure that the wealth of his investors is protected. In order to do this, a fund manager employs sophisticated risk management techniques like value at risk to ensure that both the fund manager and the investor is aware of the magnitudes of any possible financial loss. The fund manager must also ensure that the portfolio is diversified sufficiently so as to avoid negative outcomes from big falls in the value of any one asset class. Growth • After protecting the wealth of those who invest in the fund, the second most important duty of the fund manager is to ensure that the wealth of the investors, as represented by the value of the fund, increases. The extent to which the value of the fund increases is usually measured against an index of other similar funds. The ultimate aim of the fund manager is to increase the value of the fund at a rate substantially...
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...lashed to Lehman Brothers when the investment bank foundered and ultimately failed. Buyout firms proposed a lifeline, but they fell short as the financial crisis deepened, leaving Neuberger's leaders to improvise an employee buyout during the most punishing financing environment in memory. Yet, four years later, Neuberger is freshly invigorated and focused on the essentials in the way disaster survivors tend to be. Its business is in sturdy condition, its fund performance is outpacing most peers and its strong investment culture has been affirmed. If the new Neuberger is in some ways "a $200 billion start-up," as one executive characterizes it, it is also one of the country's premier and most deeply rooted asset managers. Roy Neuberger, a founding partner and guiding force of the firm, died just two years ago, at the age of 107. Until he was nearly 100, he came into the office every day. For all the drama Neuberger has undergone in the past 15 years -- going public in 1999 after 60 years as a partnership, being absorbed by Lehman in 2003 and then set adrift five years later -- Neuberger is in some ways now much closer to the firm that Roy Neuberger ran than it has been in years, with its focus squarely on its client base, and not on the demands of a parent company or public shareholders. "Our mission is totally different as part of an employee-controlled partnership," than it was as a subsidiary of a bulge-bracket investment bank, says Neuberger Chief Executive George Walker. The...
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...control over the supply of money within the country, the Federal Reserve can control the flow of money in and out of the government, this is all because the fed controls the monetary base. There are two types of economist Monetarist Economists and Keynesian economists, In the following paragraph I will explain what the difference between these two types of economist are and how they believe the Fed controls the money supply. Not only does the Fed have a large influence on the money supply within the economy. The Federal Reserve also has a tremendous amount of power over the interest rates that are being used in today’s economy. Many of the ways that money supply can be altered can also heavily affect the feds fund rate in a predictable manner, the Federal Reserve uses that to their advantage even though they cannot set a rate for the Fed funds rate, they can hold it around a target percentage that they agree upon. In 1789 Treasury Department was established all due to an act of congress, The first Secretary of the Treasury was Alexander Hamilton. Alexander Hamilton is said to be one of the greatest economist of all time. He is credited with coming up with todays financial system that the Federal Reserve and the Treasury Department has been using. The...
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...high-quality U.S. companies, the investor in a company profits along with the company. As a shareholder, when the company makes money, the investor also does. There are many ways to invest in the stock market, but it is my opinion that investing in mutual funds is probably the most appropriate way for the average person, without expertise in stock analysis, to make money. This paper plans to inform the reader on how to purchase stocks and mutual funds and which are appropriate for investing and retirement. Investing in the Stock Market When an investor owns a share of a company’s stock, he/she receives part of the company’s profit or bears some of the company’s losses, if the company does not do well (investopedia, 2011). When company does make profit for the year, there are two basic options that the company can do with the profits. They can either reinvest the profits back into the company or they can pay them out in the form of dividends. High-growth companies rarely offer dividends because all of their profits are reinvested to help sustain higher-than-average growth. Dividends can be thought of like cash payments back to shareholders for a job well done (“Get both dividend,” 2011). Most people that invest in the stock market do so by means of mutual funds, usually offered by their employer (such as through a 401k) or through an IRA. The 401k takes its name from the section of the tax code that allows for company-sponsored retirement...
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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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