global mutual fund

7/29/2019 global mutual fund

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BY:

MANJUNATHA


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MUTUAL FUNDSThe mutual fund industry in India started in 1963 with the

formation of Unit Trust of India, at the initiative of the

Government of India and Reserve Bank. The history of mutualfunds in India can be broadly divided into four distinct phases.

First Phase 1964-87 Established Unit Trust of India (UTI) .

Second Phase 1987-1993 Entry of Public Sector Funds Third Phase 1993-2003 Entry of Private Sector Funds

Fourth Phase since February 2003 consolidation and growth.


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GLOBAL 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.

Global Mutual fund that can invest in stocks and bonds throughoutthe world. Such funds typically have a portion of their assets in

American markets as well as Europe, Asia, and developing

countries. Global funds differ from international mutual funds,

which invest only in non-U.S. securities.


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ORGANISATION OF A MUTUAL FUND


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Advantages of GlobalMutual Funds

Diversification

Professional management

Liquidity

Convenience

Ease of process

Well Regulated


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Drawbacks of Global Mutual Funds

Taxes

Fees and commission

Risk management


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Association of Mutual Funds in India

Association of Mutual Funds ( Established in 1995) in India is animportant organ of all Asset Management Companies that are

registered with Securities and Exchange Board of India. Till today,

all the Asset Management Companies with Mutual Fund schemes

are the members of Association of Mutual Funds in India.

Association of Mutual Funds India, also referred to as AMFI, has

helped the Indian Mutual Fund Industry to enter into a healthy and

professional market, maintaining the market ethics and standards. It

attempts to promote the interests of both Mutual Funds and unit

holders


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Aims of Association of Mutual Funds in India

Association of Mutual Funds endeavors to maintain highstandards in all fields of operation within the industry.

Association of Mutual Funds maintains an interaction with

Securities and Exchange Board of India, and functions inaccordance with the guidelines established by SEBI.

Association of Mutual Funds in India takes up all India

awareness program on behalf of the investors.

At last but not the least association of mutual fund of India also

circulate information related to Mutual Fund Industry.


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TYPES OF MUTUAL FUNDS By Structure Open-Ended anytime enter/exit Close-Ended Schemes listed on exchange, redemption after period of

scheme is over.

By Investment Objective Equity (Growth) only in Stocks Long Term (3 years or more) Debt (Income) only in Fixed Income Securities (3-10 months) Liquid/Money Market (including gilt) Short-term Money Market (Govt.) Balanced/Hybrid Stocks + Fixed Income Securities (1-3 years)

Other Schemes Tax Saving Schemes Special Schemes

ULIP


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Steps involved in investing Global

Mutual fundStep 1- Undestand the Global Mutual funds

Step2 Recognizing the fifference between a

gobal & an international fundStep 3- Identify your investment needs.

Step4 - Choose the right Mutual Fund.(risk analysis)

Step5 - Select the ideal mix of Schemes.

Step 6 - Invest regularly

Step 7 - Keep your taxes in mind

Step 8 - Start early

Step 9- The final step


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CURRENT MARKET NEWS

ABOUT MUTUAL FUNDSFMPs: Upset with mutual funds, investors shy

away (4NOV.)

This was attributed to the fact that many of FixedMaturity Plans (FMPs) of mutual funds had investedsignificantly in commercial papers (CPs) , bonds ofreal estate companies and non-banking financial

institutions (NBFCs), pass through certificates (PTCs)and only a small portion in bank CDs


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ContinueInvestors pull out Rs 47k cr (NOV. 13)

Mutual fund investors pulled out as much as Rs47,000 crore in October the highest redemptionfrom MF schemes in a month so far this finanicialyear triggered by the meltdown in equitymarkets.

The combined assets under management of themutual fund industry saw an 18 per cent fall inOctober, dipping below the Rs 5 trillion mark forthe first time this year.


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ContinueMutual funds see value erosion of Rs 76k crore

in seven months (15 Nov.)

The mutual fund industry has witnessed a valueerosion of Rs 75,966 crore in equity-related schemes inthe first seven months of the current financial year.This is primarily because of the slide in the equity

market on account of the global financial turmoil.


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Continue.Funds book Rs 3,858-cr loss in FY09 first half (19

NOV.)

29 fund houses, which published their unauditedfinancial results for the first half ended September30, 2008, 22 mutual funds have posted a combinednet loss of Rs 4,466 crore, while the remaining

seven fund houses have reported an aggregate netprofit of Rs 608 crore in the first six months of2008-09. The fund houses had made a profit of Rs18,528 crore in the second half of 2007-08.


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What are the risks and disadvantages of investing in Global Funds?

The biggest risk is related to the advantage discussed above. Whatif your local market investments is stable but the overseas countries

where your Global funds have invested has a problem. You will takea hit on that note - take example of Libya, Egypt, unrest going onnow causing a hit on Crude Oil prices.Then, there is currency risks - investments overseas has theimplicit risk of forex charges and forex exchange rate risk. Even if

your investments are going good outside, your net return mightbecome low because of exchange rate changes

High Charges - Since overseas investments involve lot of moneytransfers and forex exchanges with various kinds of charges and

stamp duties to be paid as per the country or market specificrequirements, the fund management charges for Global Funds areusually high.So weigh your pros and cons, and then decide to invest in GlobalFunds


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What are the benefits and advantages of investingin Global Funds?

The biggest advantage is that you get opportunities to investat a global level. Say, there may be problems in your localmarket like India - political unstability, high gap in demandand supply, etc. which might hurt the returns from this local

market. Hence, having some investments in overseascompanies and funds help you mitigate this effect. Supposethings are well and stable in USA and UK, then even though

your domestic returns are taking a hit, your investments in

global companies through these global funds will not get hitbecause of these local problems.Global funds also offer diversification - across sectors, acrosscountries, across geographies, etc. which again is anadvantage of global funds.


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global mutual fund

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