The Neatest Little Guide to Mutual Fund Investing
The Neatest Little Guide to Mutual Fund Investing
Written in an accessible and entertaining style, a financial guide teaches investors how to do their own research and investing rather than relying on the advice of others and provides a solid foundation on which investors can build to learn firsthand how the mutual fund market works. The world of mutual funds can be bewildering, but finding one’s way in it has become a little easier in the past few years, with the arrival of books such as Mutual Funds for Dummies . Yet even this Dummies guide, weighing in at 406 pages, can be a little intimidating. Someone should write a smaller book, readable in an hour or so, with just the basic information on how mutual funds work and how to identify and evaluate the appropriate ones.
Which is exactly what Jason Kelly has done. The Neatest Little Guide to Mutual Fund Investing is admirably brief at 131 pages. It could be used as a textbook example of how to render a complex subject in the simplest and clearest way possible. Yet nothing essential has been left out, and even experienced fund investors could benefit from this quick read. How many investors fully grasp, for example, the various measurements of a fund’s riskiness? Kelly explains what to make of a fund’s alpha, beta, and standard deviation, and he does it in a way that anyone can understand and use. –Barry Mitzman
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Ific Bank 1St Mutual Fund Ipo Lottery Result 2010
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About Investors Group
Investors Group Vision Statement
Our vision is to be the best financial services company serving the long term needs of individual Canadians.
At Investors Group:
We relate to our diverse clients through comprehensive planning.
In all of our endeavours we are diligent in our efforts.
We respect each other and the communities we serve by being people who care.
Corporate profile
Investors Group Inc. is a Canadian leader in providing personal financial planning services, and is dedicated to building lasting client relationships. Our primary objective is to help Canadians plan for financial security by providing quality financial planning advice and products through a network of Consultants.
Investors Group offers financial planning, a unique family of mutual funds and a comprehensive range of other investment products and financial services, including Registered Retirement Savings Plans, Registered Retirement Income Funds, Deferred Profit Sharing Plans, life and disability insurance, Guaranteed Investment Certificates and mortgages.
Today, Investors Group serves over one million clients through our dedicated Consultant Network and staff team, working out of hundreds of Financial Planning Centres across Canada.
Investors Group Inc. is a member of the IGM Financial Inc. group of companies. The shares of IGM Financial Inc. are listed on The Toronto Stock Exchange. The stock exchange symbol is IGM.
.
The draw of the lottery for the IFIC Bank 1st Mutual Fund initial public offering (IPO) will be held on March 09, 2010 (10:30 AM)
Next at the Bangabandhu International Conference Centre at the Sher-e-Bangla Nagar in Dhaka, President of the DSE Rakibur Rahman confirmed Wednesday. The trading of the GP shares on the bourses is expected to begin by November 15 next.
The Scheule for IFIC Bank First Mutual Fund Lottery:
Date:March 09, 2010
Time: (10:30 AM)
Venue: Bangabandhu International Conference Centre
You can Get this result by Click Here
IIFIC Bank 1st Mutual Fund
SIZE OF THE FUND:Tk.1,200,000,000 divided into 120,000,000 units at par value of Tk. 10 each
SPONSOR’S CONTRIBUTION: 25,000,000 Units of Tk. 10 each at par for Tk. 250,000,000
PRE IPO PLACEMENT: 55,000,000 Units of Tk. 10 each at par for Tk. 550,000,000
PUBLIC OFFER : 40,000,000 Units of Tk. 10 each at par for Tk. 400,000,000
RESERVED FOR MUTUAL FUNDS: 4,000,000 Units of Tk. 10 each at par for Tk. 40,000,000
NON RESIDENT BANGLADESHIS: 4,000,000 Units of Tk. 10 each at par for Tk. 40,000,000
RESIDENT BANGLADESHIS: 32,000,000 Units of Tk. 10 each at par for Tk. 320,000,000
This Offer Document sets forth concisely the information
about the fund that a prospective investor ought to know
before investing. This Offer Document should be read
before making an application for the Units and should
be retained for future reference.
The particulars of the fund have been prepared in
accordance with as amended till date and filed with
Securities and Exchange Commission of Bangladesh.
The Issue/Fund shall be placed in “A” category.
The Fund shall apply for listing with both the Stock
Exchanges.
SPONSOR :
IFIC Bank Limited
TRUSTEE:
Investment Corporation of Bangladesh (ICB)
CUSTODIAN:
Investment Corporation of Bangladesh (ICB)
ASSET MANAGEMENT COMPANY:
RACE Management PCL
Subscription
Subscription opens:February 7,2010
Subscription closes: February 11,2010
For Non-Resident Bangladeshis
subscription closes on February 20,2010
Date of Publication of Prospectus:January 11,2010
IFIC BANK 1ST MUTUAL FUND
Highlights
1. Name: IFIC Bank 1st Mutual Fund
2. Size of the Fund: Tk. 1,200,000,000 divided into 120,000,000 units at par value of Tk. 10.00
each. In future the fund size will not be changed.
3. Face Value: Tk. 10.00 per unit.
4. Nature: Closed-end Mutual Fund with a tenure of 10 years.
5. Objective: The objective of the Fund is to provide attractive dividend to the unit holders by investing the
proceeds in the various instruments in the Bangladeshi Capital Market and Money Market.
6. Target Group: Individuals, institutions, non-resident Bangladeshis (NRB), mutual funds and collective
investment schemes are eligible to apply for investment in the Fund.
7. Dividend: Minimum 70% income of the Fund will be distributed as dividend in Bangladeshi Taka only at the
end of each accounting year. The Fund shall create a dividend equalization reserve fund to
ensure consistency in dividend.
8. Mode of Distribution: The dividend will be distributed within 30 days from the date of declaration.
9. Transferability: Units are transferable. The transfer will be made by the CDBL under electronic settlement
process.
10. Encashment: The Fund will be listed with DSE and CSE. So investment in this Fund will easily be encashable.
11. Tax Benefit: Income will be tax free up to certain level, which is permitted as per Finance Act. Investment in
the Fund would qualify for investment tax credit under section 44(2) of the Income Tax Ordinance
1984.
12. Report & Accounts: Every unit holder is entitled to receive annual report together with the yearly and half-yearly
statements of accounts as and when published.
IFIC BANK 1ST MUTUAL FUND
Risk Factors
Investing in the IFIC Bank 1st Mutual Fund (hereinafter the Fund) involves certain considerations in addition to the risks normally
associated with making investments in securities. There can be no assurance that the Fund will achieve its investment objectives.
The value of the Fund may go down as well as up and there can be no assurance that on redemption, or otherwise, investors will
receive the amount originally invested. Accordingly, the Fund is only suitable for investment by investors who understand the
risks involved and who are willing and able to withstand the loss of their investments. In particular, prospective investors should
consider the following risks:
1. In General: There is no assurance that the Fund will meet its investment objective; investors could lose money by
investing in the Fund. As with all mutual funds, an investment in the Fund is not insured or guaranteed by the
Government of Bangladesh or any other government agency.
2. Market Price Risk: Stock prices and Mutual Fund prices generally fluctuate because of the interplay of the various
market forces that may affect a single issuer, industry, or market as a whole. The Fund may lose its value or experience
a substantial loss on its investments due to such market volatility.
3. NAV Risk: Stock market trends show that prices of many listed securities move in unpredictable directions, which may
affect the value of the Fund’s portfolio of listed securities. Depending on its exposure to such securities, the net asset
value of units issued under this Fund can go up or down depending on various factors and forces affecting the capital
markets. Moreover, there is no guarantee that the market price of unit of the Fund will fully reflect their underlying net
asset values.
4. Issuer Risk: In addition to market and price risk, value of an individual security can, in addition, be subject to factors
unique or specific to the issuer, including but not limited to management malfeasance, lack of accounting transparency,
management performance, management decision to take on financial leverage. Such risk can develop in an
unpredictable fashion and can only be partially mitigated, and sometimes not at all, through research or due diligence.
To the degree that the Fund is exposed to a security whose value declines due to issuer risk, the Fund’s value may be
impaired.
5. Legal Risk: The Honorable High Court, in its verdict on November 8th, allowed mutual funds to expand their capital
base by issuing bonus and rights shares or pay dividends through cash or bonus shares, without curbing the regulator’s
absolute power to determine which funds would be eligible to do so. However, although the case has been resolved by
the High Court, the Securities and Exchange Commission still has the provision to appeal against the verdict with the
Appellate Division of the Supreme Court and by exercising that option, the issue of dividends in any form may remain
pending once again.
6. Asset Allocation Risk: Due to a very thin secondary debt market in Bangladesh, it would be difficult for the Fund
Manager to swap between asset classes, if and when required. In addition, limited availability of money market
instruments in the market implies that there are only few opportunities for short term or temporary investments for
the Fund.
7. Lack of Diversification Risk: Due to small number of listed securities in both the stock exchanges, it may be difficult to
invest the Fund’s assets in a widely diversified portfolio.
8. Liquidation Risk: Market conditions and investment allocation may impact on the ability to sell securities during periods
of market volatility. The Fund may not be able to sell securities or instruments at the appropriate price and/or time.
9. Dividend Risk: If the companies wherein the Fund will be invested fail to pay expected dividend, it may affect the
overall returns of the Fund.
10. Investment Strategy Risk: The Fund is subject to management strategy risk because it is an actively managed
investment portfolio.The AMC will apply investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these techniques and analyses will produce the desired results.
11. Socio-Political & Natural Disaster Risk: Uncertainties resulting from political and social instability may affect the value
of the Fund’s Assets. In addition, adverse natural climatic condition may hamper the performance of the Fund.
IFIC BANK 1ST MUTUAL FUND
1. PRELIMINARY
1.1. PUBLICATION OF PROSPECTUS FOR PUBLIC OFFERING:
RACE Management PCL has received Registration Certificate from the Securities and Exchange Commission (SEC) under the
consistency in dividend.
5) The Asset Management Company shall dispatch the dividend warrants at the expense of the Fund, within 30 days of the
declaration of the dividend and shall submit a statement within next 7 (seven) days to the Commission, the Trustee and the
Custodian.
6) Before record of ownership by the CDBL, a transferee shall not possess the right to any dividend declared by the Fund.
Total NAV
——————————-
No. of units outstanding
IFIC BANK 1ST MUTUAL FUND
4. RISK CONSIDERATIONS
4.1. RISK FACTORS:
Investing in the IFIC Bank 1st Mutual Fund (hereinafter the Fund) involves certain considerations in addition to the risks normally
associated with making investments in securities. There can be no assurance that the Fund will achieve its investment
objectives. The value of the Fund may go down as well as up and there can be no assurance that on redemption, or otherwise,
investors will receive the amount originally invested. Accordingly, the Fund is only suitable for investment by investors who
understand the risks involved and who are willing and able to withstand the loss of their investments. In particular, prospective
investors should consider the following risks:
1. In General: There is no assurance that the Fund will meet its investment objective; investors could lose money by
investing in the Fund. As with all mutual funds, an investment in the Fund is not insured or guaranteed by the
Government of Bangladesh or any other government agency.
2. Market Price Risk: Stock prices and Mutual Fund prices generally fluctuate because of the interplay of the various
market forces that may affect a single issuer, industry, or market as a whole. The Fund may lose its value or experience
a substantial loss on its investments due to such market volatility.
3. NAV Risk: Stock market trends show that prices of many listed securities move in unpredictable directions, which may
affect the value of the Fund’s securities of listed securities. Depending on its exposure to such securities, the net asset
value of units issued under this Fund can go up or down depending on various factors and forces affecting the capital
markets. Moreover, there is no guarantee that the market price of unit of the Fund will fully reflect their underlying net
asset values.
4. Issuer Risk: In addition to market and price risk, value of an individual security can, in addition, be subject to factors
unique or specific to the issuer, including but not limited to management malfeasance, lack of accounting transparency,
management performance, management decision to take on financial leverage. Such risk can develop in an
unpredictable fashion and can only be partially mitigated, and sometimes not at all, through research or due diligence.
To the degree that the Fund is exposed to a security whose value declines due to issuer risk, the Fund’s value may be
impaired.
5. Legal Risk: The Honorable High Court, in its verdict on November 8th, allowed mutual funds to expand their capital
base by issuing bonus and rights shares or pay dividends through cash or bonus shares, without curbing the regulator’s
absolute power to determine which funds would be eligible to do so. However, although the case has been resolved by
the High Court, the Securities and Exchange Commission still has the provision to appeal against the verdict with the
Appellate Division of the Supreme Court and by exercising that option, the issue of dividends in any form may remain
pending once again.
6. Asset Allocation Risk: Due to a very thin secondary debt market in Bangladesh, it would be difficult for the Fund
Manager to swap between asset classes, if and when required. In addition, limited availability of money market
instruments in the market implies that there are only few opportunities for short term or temporary investments for
the Fund.
7. Lack of Diversification Risk: Due to small number of listed securities in both the stock exchanges, it may be difficult to
invest the Fund’s assets in a widely diversified portfolio.
8. Liquidation Risk: Market conditions and investment allocation may impact on the ability to sell securities during periods
of market volatility. The Fund may not be able to sell securities or instruments at the appropriate price and/or time.
9. Dividend Risk: If the companies wherein the Fund will be invested fail to pay expected dividend, it may affect the
overall returns of the Fund.
10. Investment Strategy Risk: The Fund is subject to management strategy risk because it is an actively managed
investment portfolio. The AMC will apply investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these techniques and analyses will produce the desired results.
11. Socio-Political & Natural Disaster Risk: Uncertainties resulting from political and social instability may affect the value
of the Fund’s Assets. In addition, adverse natural climatic condition may hamper the performance of the Fund.
IFIC BANK 1ST MUTUAL FUND
4.2. EXPECTED MARKET PERFORMANCE OF THE FUND:
1) It is expected that demand for the IFIC Bank 1st Mutual Fund units will always rule over supply.
2) Brand name of IFIC Bank Limited and Trustee, ICB’s track record in the successful marketing of several mutual funds in the
past may motivate investors to invest in this Fund.
3) World class investment management team of the RACE Management PCL as a new-generation Asset Management Company
(AMC) would attract investors to invest in this Fund.
4.3. WHO SHOULD INVEST AND HOW MUCH TO INVEST:
1) Individuals who do not have tolerance of bearing risk and know nothing about the functioning of the capital market need
not apply for the units of the Fund.
2) Individuals who are looking for long-term capital growth and consistent dividend payment and are comfortable with the
risks associated with equity investments should consider investing in the Fund.
3) An individual should also consider investing in the Fund if he/she can accept some variability of returns, have a moderate
tolerance for risk and are planning to invest in the Fund over the medium to long-term.
4) Considering other factors like the investment opportunities available in the market, return expectation, income level and
consumption pattern, one may put only a portion of his/her total portfolio into the Fund.
IFIC BANK 1ST MUTUAL FUND
5. FORMATION, MANAGEMENT AND ADMINISTRATION
5.1. SPONSOR OF THE FUND:
IFIC Bank Limited is a first-generation private commercial bank with 82 (eighty two) branches across various regions in
Bangladesh. With its stock listed on both Dhaka and Chittagong Stock Exchanges, IFIC Bank Ltd. offers a full range of commercial
banking products and services to corporate, middle-market and retail segments. Being one of the oldest private commercial
banks, IFIC Bank has unique insights into the dynamics in the corporate and financial sector. The Bank strongly believes that the
stock market in Bangladesh is entering a secular growth phase and is becoming an attractive destination for both savings and
investment capital in Bangladesh. As a result, IFIC is increasing its presence in the Bangladeshi stock market and has recently
started stock trading and brokerage services for its clients.
IFIC Bank is the first first-generation bank to sponsor a mutual fund, believing that IFIC Bank 1st Mutual Fund will play a positive
role in developing the Bangladeshi Mutual Fund industry. With that in mind, IFIC Bank has appointed RACE Management PCL as
the Fund Manager. RACE Management is a next-generation asset management company has successfully launched the EBL First
Mutual Fund, the first-ever bank sponsored mutual fund in Bangladesh.
5.2. TRUSTEE & CUSTODIAN OF THE FUND:
In order to ensure maximum trust and confidence of the investors, supervisory bodies and potential investors in the fund, the
Investment Corporation of Bangladesh (ICB) will act as the Trustee and Custodian of the Fund.
The Investment Corporation of Bangladesh (ICB) was established on 01 October 1976, under “The Investment Corporation of
Bangladesh” Ordinance, 1976 (No. XL of 1976) to encourage and broaden the base of investment, develop the capital market,
mobilize savings, promote and establish subsidiaries for business development and provide for matters ancillary thereto. Over
the years, the activities of ICB have grown manifold, particularly in Merchant Banking, Mutual Funds operations and stock
brokerage activities. ICB is the biggest investment bank and the harbinger of mutual fund industry in the country. Out of
country’s 17 (seventeen) closed-end mutual funds, ICB and its subsidiary manage 13 (thirteen) mutual funds.
As of August 2009, ICB has acted as Trustee to the 11 debenture issuances involving Tk. 155.95 crores, issues of 8 bond issuances
involving Tk. 817 crores. ICB also performed the responsibilities of trustee and custodian to 9 closed-end mutual funds of Tk. 475
crores and 2 open-end mutual funds with initial capital of Tk. 40 crores.
5.3. ASSET MANAGER OF THE FUND:
RACE Management PCL (hereinafter RACE) will act as the Asset Manager of the Fund. RACE is a second-generation asset
management company, receiving its Asset Management license in September 2008 after fulfilling rigorous due diligence
requirements of the SEC. RACE Management has already established a successful track record by launching the first-ever
commercial bank sponsored mutual fund, EBL First Mutual Fund and is the only second generation asset management company
to have a mutual fund under management in Bangladesh.
The RACE Team: With about 30 professionals, RACE has one of the largest asset management teams in Bangladesh which
includes (1) senior Bangladeshi investment professionals with world-class training and over a decade of experience in
investment management and research in some of the worlds’ most developed capital markets; (2) Senior Bangladeshi
professionals from the local banking and financial services industry with strong operational experience and an extensive contact
base among the local business community; (3) a cadre of young professionals who have gained unique insights into the local
capital markets through the application of sophisticated investment techniques and on-the-ground research.
The investment management operation of RACE is managed by a team of investment professionals and is guided by an
Investment Committee. The Investment Committee reviews the Fund portfolio selection process to ensure compliance with the
objectives set out in the Trust Deed. In addition, the RACE Investment Committee pays special regard to guidelines regarding
restriction on investments/investment limits as prescribed from time to time; these restrictions relate to single company/group
investments, investments in associate companies, investments in unrated debt instruments etc. In addition, the RACE
Investment Committee also reviews the portfolio periodically to assess liquidity positions and evaluate the risk parameters and
will, from time to time, rebalance the portfolio.
IFIC BANK 1ST MUTUAL FUND
RACE Approach to Fund Management: Highly Process-Driven Investment Approach
A flexible yet disciplined investment process is the hallmark of a professional investment management fund. Incorporating the
intellectual capital and collective experience of the RACE’s senior investment professionals, RACE has developed a 7-step
investment process:
Step 1: Universe Selection. The first step of the investment process begins with identifying the universe of stocks. These
stocks are then classified in four categories based on RACE’s proprietary selection methodology.
Step 2: Focus List. The universe of stock is then narrowed down to build a prospective focus list. This step is usually done in
phases. The first phase involves narrowing down the list through RACE’s proprietary filtering process. The second phase
involves narrowing the list further through the fundamental research inputs.
Step 3: “Top Down” Analysis involves analysis of macroeconomic trends, analysis on broad market indices, analysis of fund
flow trend to formulate sector biases and sector allocations.
Step 4: “Bottoms Up” Company Analysis. This step involves a combination of individual security analysis based on multiple
parameters, including valuation, qualitative analysis to identify business trends, competitive outlook and corporate
management. These analyses are supplemented by company visits and information exchange with management.
Step 5: Portfolio Construction. The next step is to create an optimum portfolio with the goal of maximizing returns and
minimizing risk.
Step 6: Risk Management. This step applies the pre-determined position limits to the portfolio, limiting sector exposure and
individual stock exposure. Maintaining lower volatility is also an important concern; to this end, beta adjustment and other
sophisticated risk analysis is used.
Step 7: Trade Execution: RACE uses a combination of quantitative strategies and market information to maximize its trade
executions. To this end, RACE has selected a panel of brokers to execute its trades in an efficient and confidential manner.
5.4. AUDITORS:
The Trustee, ICB has appointed Hoda Vasi Chowdhury & Co. Chartered Accountants as the Auditor of the Fund for the first year.
It is one of the reputed and oldest audit firms of the country and is associated with world-renowned Deloitte Touche Tohmatsu.
The Trustee will continue to appoint the Fund Auditor throughout the tenure of the Fund.
5.5. LIMITATION OF EXPENSES:
1) The initial issue expenses in respect of the Fund shall not exceed 5% of the Fund to be raised, the details of which are
provided in this Prospectus.
2) The total expenses charged to the Fund except the amortization of initial issue expenses including transactions cost in the
form of stock brokerage against buy and sell of securities forming a part of acquisition or disposal cost of such securities,
transaction fees payable to the Custodian against acquisition or disposal of securities, CDBL Charges, listing fees payable to
the stock exchanges, the annual registration fees payable to the Commission, audit fees, cost for publication of reports and
periodicals, bank charge, etc., shall not exceed 4% of the weekly average net assets outstanding during any accounting year
or as may be determined by the Rules.
IFIC BANK 1ST MUTUAL FUND
5.6. FEES AND EXPENSES:
The Fund will pay the fees of Asset Management Company, the Trustee and the Custodian together with any other fees,
commissions and expenses as may arise from time to time. The Fund will bear its own costs and expenses incurred/accrued in
connection with its formation, promotion, registration, public offering, listing together with certain other costs and expenses
incurred in its operation, including without limitation, expenses of legal and consulting services, auditing, other professional fees
and expenses, brokerage, share/debenture registration expenses, guarantee or underwriting commission and fees due to the
SEC. The Fund will also bear all other incidental expenses including printing, publication and stationery relating to its smooth and
fair operation.
RACE has estimated the normal annual operating expenses of the Fund will not exceed 4% of the average NAV of the Fund.
However, there may be variation in the actual operating expenses of the Fund. Major expenses of the Fund are detailed as
follows:
1) Issue and Formation Expenses: Issue and formation expenses are estimated to be not over 5% of the total Fund size. The
expenses will be amortized within 10 (ten) years on a straight-line method. The estimated expenses for the issue and
formation of the Fund are presented below:
1. Banker to the issue fee/Collection Charge : 0.60 percent
2. Formation Fee Payable to AMC : 1.00 percent
3. Printing & Publication : 0.60 percent
3. Legal Expenses (Listing Fees, registration Fees etc.) : 1.20 percent
4. Other expenses : 0.80 percent
Total : 4.20 percent
2) Management Fee: As per িসিকউির
Getting Started in Mutual Funds (Getting Started In…..)
Getting Started in Mutual Funds (Getting Started In…..)
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A fresh look at the ever-changing world of mutual funds
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- Acquaints you with the various types of mutual funds and how they are structured
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InvestorsGroup_RonSombilonGallery (18)_
Image by Ron Sombilon Gallery
Olympic Celebration Party @ the Shangri La Hotel – hosted by Simon Wisniewski & Robert Bisbicis
photos by Ron Sombilon
www.InvestorsGroup.com
www.RonSombilonGallery.com
About Investors Group
Investors Group Vision Statement
Our vision is to be the best financial services company serving the long term needs of individual Canadians.
At Investors Group:
We relate to our diverse clients through comprehensive planning.
In all of our endeavours we are diligent in our efforts.
We respect each other and the communities we serve by being people who care.
Corporate profile
Investors Group Inc. is a Canadian leader in providing personal financial planning services, and is dedicated to building lasting client relationships. Our primary objective is to help Canadians plan for financial security by providing quality financial planning advice and products through a network of Consultants.
Investors Group offers financial planning, a unique family of mutual funds and a comprehensive range of other investment products and financial services, including Registered Retirement Savings Plans, Registered Retirement Income Funds, Deferred Profit Sharing Plans, life and disability insurance, Guaranteed Investment Certificates and mortgages.
Today, Investors Group serves over one million clients through our dedicated Consultant Network and staff team, working out of hundreds of Financial Planning Centres across Canada.
Investors Group Inc. is a member of the IGM Financial Inc. group of companies. The shares of IGM Financial Inc. are listed on The Toronto Stock Exchange. The stock exchange symbol is IGM.
.
A mutual fund is a professionally managed type of collective investment system that pools money from many investors and invests generally in investment securities (stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities such as precious metals).
Mutual funds are separated into shares and can be bought much like stocks, allowing mutual funds to have a high liquidity. Mutual funds are fitting, exceptionally for small investors, because they diversify an individual’s monies among a number of investments. Investors share in the profits of a mutual fund, and mutual fund shares can be sold back to the company on any business day at the net asset value price. Mutual funds may or may not have a load, or fee; however, funds with a load will offer advice from a specialist, which may assist the investor in choosing a mutual fund.
Types of Mutual Funds
Open End Mutual Fund – A mutual fund with shares bought and sold by the fund itself. An investor invests by sending the mutual fund company a check which then calculates the Net Asset Value at the close of business that day and credits the investor with the suitable number of shares. When the investors sells their shares, the mutual fund company redeems the shares and calculates the amount owed based on the Net Asset Value.
Closed End Mutual Fund – An investment mutual fund that trades like other stocks. The price is determined by the marketplace. If the price is over net asset value the mutual fund is said to trade at a premium. If the price is lower than the net asset value the fund is said to trade at a discount (normally funds trade at a small [5-10%] discount to net asset value).
Index Fund – fund that seeks to mirror the results of an index such as the S&P 500 Index, the Wilshire 5000 Index or the FTSEurofirst. Since the fund merely tries to mirror the makeup of the index the costs of analysts etc. are avoided and index funds benefit from a lower expense ratio.
Net Asset Value (NAV) – Total assets minus total liabilities then divided by the total number of outstanding shares. The NAV is calculated daily by the funds.
Front End Load – an open end mutual fund with a sales fee (in general to pay salespeople, stock brokers, etc.). The “load” is a percentage of total purchase price and often declines with larger invested amounts.
Back End Load – an open end mutual fund with a sales fee (typically to pay salespeople, stock brokers, etc.). The “load” is charged to the investor when they sell rather than they buy. It is calculated as percentage of total sales price.
12b-1 fees – an open end mutual fund with a sales fee (customarily to pay salespeople, stock brokers, etc.). This fee is a percentage of total value. Often it is charged on mutual funds without front end loads (to provide payment to salespeople and stock brokers without having to make the sales charge as visible to the customer).
Money Market Fund – Money market funds hold 26% of mutual fund assets in the United States. [12] Money market funds entail the least risk, as well as lower rates of return. Unlike certificates of deposit (CDs), money market shares are liquid and redeemable at any time.
Exchange Traded Fund – An exchange-traded fund (or ETF) (also known as Exchange-Traded Product (ETP)) are securities that closely resemble index funds, but can be bought and sold during the day just like common stocks. These investment vehicles allow investors a opportune way to purchase a broad basket of securities in a single transaction. Essentially, ETFs offer the convenience of a stock along with the diversification of a mutual fund.
Inverse Funds – ETFs that aim to act as short positions would. For example if the index they target declines 1% the inverse fund would increase 1%.
Hedge Fund – Hedge Funds are private investment partnerships (exempt from SEC rules for mutual funds). Normally hedge funds take aggressive, often speculative and leveraged investment strategies but that is not required to be a hedge fund. Often the fund managers are paid performance fees, taking a significant percentage of gains. They are only open for investments from wealthy investors (over 0,000 in income and net worth of over million).
Equity Funds – consist for the most part of stock investments, are the most common type of mutual fund. Equity funds hold 50 percent of all amounts invested in mutual funds in the United States. Often equity funds focus investments on particular strategies and certain types of issuers.
Capitalization (Mid-Cap and Large Cap) – SMALL CAP FUND, fund comprised of relatively small publicly traded corporations, with a total market value, or capitalization, of less than 0 million. MID-CAP FUND, a fund that invests mainly in the stocks of companies with a medium market capitalization (mid caps). LARGE CAP FUND, the stocks of companies with market capitalizations of billion.
Growth Fund – A growth fund is a type of mutual fund that usually focuses on the purchase of equities likely to have outstanding growth potential. These mutual funds take higher investment risks and invest in more volatile stocks to attain above average growth. Stock values may appreciate or depreciate depending on the success of the companies invested in and other market factors.
Funds of Funds – A “fund of funds” (FoF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bonds or other securities. This type of investing is often referred to as multi-manager investment. There are different types of ‘fund of funds’, each investing in a different type of collective investment scheme (typically one type per FoF), eg. ‘mutual fund’ FoF, hedge fund FoF, private equity FoF or investment trust FoF.
We all have receive lots of advices all through out life, some advices are welcome, some are unwelcome and very few are actually valuable or even profitable. So if you could want some profitable and useful advice in life, here are the investment advice mutual funds at your disposal. What other advice could be more profitable than an instruction that helps you earn profits or helps you earn money?
There are many different mutual funds available in the financial market. If you are an newbie or a beginner in the world of financial trading and investing, you would be at first confused by even the mention of terms like stocks, mutual funds, stock market, capital, investment, portfolio, return of investment, equities, options, etc. Finding investment advice about mutual funds or assistance in investing in the right mutual fund according to your requirements and needs, is a big step by step journey on the path of mutual fund investing and gaining know how and knowledge about mutual fund investments.
Where can you get the services of the investment advice for mutual funds? They are omnipresent on the Internet. You simply need to log in to the net, and you will have a sea of information with numerous investment advice on mutual funds, out there. Now if you have been thinking that all this advice comes at a dear price, you have been thinking wrong. That is because these investment advice on mutual funds, dole out all the info and education and training, completely free of charge and cost or by a free trial basis.
A mutual fund screener, like the one offered at http://www.Zacks.com, offers free mutual fund screening without any hidden costs or terms and conditions, merely for the reason that their business is dependent on investors like you. Unless you learn and train yourself to invest in the market, how will these companies earn? The complete business or earnings of these investment advice mutual funds are on the commissions they gain, while you trade in the market. They very well know that unless the investor, (that is you) is trained and not kept informed about the knacks of the trade, they will not trade in the uncertain financial market. And unless the investor trades, they cannot earn any money on commissions.
Additional Info at:
Zacks.com Mutual Funds and Zacks.com Mutual Fund Screener
Mutual Funds explained in simple terms.
Related Mutual Funds Articles
Mutual Fund Industry Handbook : A Comprehensive Guide for Investment Professionals
Mutual Fund Industry Handbook : A Comprehensive Guide for Investment Professionals
“The Mutual Fund Industry Handbook is a remarkably important work . . . I am profoundly impressed by the broad and comprehensive sweep of information and knowledge that this book makes available to industry participants, college and business school students, and anyone else with a serious interest in this industry.”
— From the Foreword by John C. Bogle President, Bogle Financial Markets Research Center Founder and former chief executive, The Vanguard Group
A Foreword by John C. Bogle, founder of The Vanguard Group and one of the most respected leaders in the mutual fund industry, sets the stage for this authoritative book that explains the complexities of the phenomenal industry in simple terms.
Investors like the fact that mutual funds offer professional management, easy diversification, liquidity, convenience, a wide range of investment choices, and regulatory protection. Mutual Fund Industry Handbook touches on all of those features and focuses on the diverse functions performed in the day-to-day operations of the mutual fund industry. You’ll learn about:
- Front-office functions-analysis, buying, and selling.
- Back-office functions, including settlement, custody, accounting, and reporting.
- Commission structures-front-end loads, back-end loads, or level loads.
- The various fund categories used by the Investment Company Institute, Morningstar, and Lipper.
- The roles played by fund managers, investment advisors, custodial banks, distributors, transfer agents, and other third-party service providers.
If you want a definitive reference on the mutual fund industry, this is the book for you.
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Fund Spy: Morningstar’s Inside Secrets to Selecting Mutual Funds that Outperform
- ISBN13: 9780470414019
- Condition: New
- Notes: BRAND NEW FROM PUBLISHER! BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed
Author Russel Kinnel walks readers through the handful of key factors they need to pick winning funds. Armed with the quantitative data and qualitative research, they will gain the confidence to pick great funds for the long-term. This book will be accompanied by a web-based tool created by Morningstar, which will enable readers to evaluate their own funds using Kinnel’s criteria.
Written in a fun and accessible manner, The Fund Spy offers Kinnel’s unique insight as a 14-year Morningstar fund analyst. He speaks plainly about the conflicts that can go against investors’ interests, explaining how to avoid traps and push out the slick sales pitches facing today’s investors. He also offers several “10 lists,” which provide quick answers to investors’ most common questions (e.g., the Top 10 Funds to Recommend to Relatives, the 10 Best Contrarian Managers, the 10 Most Overrated Managers).
List Price: $ 24.95
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NEW - Mutual Funds For Dummies, 6th edition
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Comprehensive, Fund, Guide, Handbook, Industry, Investment, Mutual, Professionals | 
Leave a commentTop 10 Reasons To Buy A Mutual Fund
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Olympic Celebration Party @ the Shangri La Hotel – hosted by Simon Wisniewski & Robert Bisbicis
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www.InvestorsGroup.com
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About Investors Group
Investors Group Vision Statement
Our vision is to be the best financial services company serving the long term needs of individual Canadians.
At Investors Group:
We relate to our diverse clients through comprehensive planning.
In all of our endeavours we are diligent in our efforts.
We respect each other and the communities we serve by being people who care.
Corporate profile
Investors Group Inc. is a Canadian leader in providing personal financial planning services, and is dedicated to building lasting client relationships. Our primary objective is to help Canadians plan for financial security by providing quality financial planning advice and products through a network of Consultants.
Investors Group offers financial planning, a unique family of mutual funds and a comprehensive range of other investment products and financial services, including Registered Retirement Savings Plans, Registered Retirement Income Funds, Deferred Profit Sharing Plans, life and disability insurance, Guaranteed Investment Certificates and mortgages.
Today, Investors Group serves over one million clients through our dedicated Consultant Network and staff team, working out of hundreds of Financial Planning Centres across Canada.
Investors Group Inc. is a member of the IGM Financial Inc. group of companies. The shares of IGM Financial Inc. are listed on The Toronto Stock Exchange. The stock exchange symbol is IGM.
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1. Mutual Funds Offer Diversification:
The beauty of a mutual fund is that you can buy a mutual fund and obtain instant access to a hundreds of individual stocks or bonds. Otherwise, in order to diversify your portfolio, you might have to buy individual securities, which exposes you to more potential volatility.
2. Mutual Funds are Professionally Managed:
Many investors don’t have the resources or the time to buy individual stocks. Investing in individual securities, such as stocks, not only takes resources, but a considerable amount of time. By contrast, mutual fund managers and analysts wake up each morning dedicating their professional lives to researching and analyzing current and potential holdings for their mutual fund.
3. Mutual Funds Come in Many Varieties:
A mutual fund comes in many types and styles. There are stock funds, bond funds, sector funds, target-date mutual funds, money market mutual funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index mutual funds). The availability of different types of mutual funds allows you to build a diversified portfolio at low cost and without much difficulty.
4. Mutual Funds Have Low Minimums:
Many mutual fund companies allow investors to get started in a mutual fund with as little as ,000. Schwab’s mutual fund family has a minimum of 0 for many of their mutual funds.
5. Systematic Investing and Withdrawals with Mutual Funds:
It is simple to invest regularly in a mutual fund. Many mutual fund companies allow investors to invest as little as per month directly into a mutual fund. Money can be pulled directly from a bank account and invested directly in the mutual fund. On the other hand, money can be regularly withdrawn from a mutual fund and be deposited into a bank account. There are generally no fees for this service.
6. Mutual Funds Offer Automatic Reinvestment:
An investor can easily and automatically have capital gains and dividends reinvested into their mutual fund without a sales load or extra fees.
7. Mutual Funds Offer Transparency:
Mutual fund holdings are publicly available (with some delays in reporting), which ensures that investors are getting what they pay for.
8. Mutual Funds Are Liquid:
If you want to sell your mutual fund, the proceeds from the sale are available the day after you sell the mutual fund.
9. Mutual Funds Have Audited Track Records:
A mutual fund company must maintain performance track records for each mutual fund and have them audited for accuracy, which ensures that investors can trust the mutual fund’s stated returns.
10. Safety of Investing in Mutual Funds:
If a mutual fund company goes out of business, mutual fund shareholders receive an amount of cash that equals their portion of ownership in the mutual fund. Alternatively, the mutual fund’s Board of Directors might elect a new investment advisor to manage the mutual fund.
While there are a plethora of investment options (individual stocks, ETFs, and closed-end funds, to name a few) a mutual fund can offer a simple, efficient way to invest for retirement, education or other financial goals, by Lee McGowan, About.com.
Morningstar Guide to Mutual Funds: Five-Star Strategies for Success
Morningstar Guide to Mutual Funds: Five-Star Strategies for Success
- ISBN13: 9780470137536
- Condition: New
- Notes: BRAND NEW FROM PUBLISHER! BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed
From one of the most trusted and respected names in the financial industry comes the Morningstar Guide to Mutual Funds, Second Edition. This valuable resource has been completely revised and updated to meet the needs of today’s demanding investor. Filled with introductory material as well as more advanced topics, it outlines the latest tools and techniques for analyzing and selecting mutual funds. It also allows readers to take an objective and informed look at their investments and learn what mutual funds are, when and how they should be used, and what the advantages and disadvantages are of investing in them. Written for both the seasoned investor and the beginner, Morningstar Guide to Mutual Funds, Second Edition presents clear, easy-to-understand guidance that readers can count on when looking to make wise investment choices regarding mutual funds. Christine Benz (Chicago, IL) is Director of Mutual Fund Analysis at Morningstar, where she manages a staff of 35 mutual-fund analysts. Previously, she was the editor of Morningstar(r) FundInvestor, a monthly newsletter, as well as Morningstar Funds 500, an annual publication.
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David Scott’s Guide to Investing In Mutual Funds
This invaluable new guide from financial expert David Scott analyzes the role that mutual funds play in achieving a balanced portfolio. In addition to explaining how shares in mutual funds are bought and sold, this clearly written book will show investors
• how to assess a fund”s investment objective in light of their own goals
• how to choose from among stock, bond, and money market funds
• how to evaluate the three different kinds of income associated with mutual funds — dividends, capital gains, and market appreciation
• how to save on fees when buying and redeeming mutual fund shares
List Price: $ 9.95
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A Commonsense Guide to Mutual Funds,Mary Rowland Book money investment
 | US $14.95 (0 Bid) End Date: Sunday May-20-2012 19:43:43 PDT Bid now | Add to watch list |
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Posted in Mutual Funds | FiveStar, Funds, Guide, Morningstar, Mutual, Strategies, Success | Leave a commentMutual Fund Schemes in India – Which One to Choose?
Mutual Fund Chart Caught In The Bark (Washington, DC)
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With the ever growing mutual fund schemes in India it is quite difficult to pick the right one that suits your needs and requirements. Each fund has a different strategy to focus on when investing.
You can choose the one which meets your financial objectives. It’s always suggested you know the scheme well before deciding to invest. Don’t blindly invest on somebody’s guidance.
You need to research on the possible growth of your fund depending on the history and whether your financial objective will be met by choosing a particular scheme.
It’s safe to invest in blue chip companies as they are already well established and carry low risk. There are plenty of schemes of mutual funds available in the market and we explain some of them in this article.
Types of mutual funds in India:
Open ended schemes: These do not have fixed maturity. Liquidity is the key feature. Here units can be bought / sold at net asset value (NAV) related prices whenever required.
Close ended schemes: These schemes have a fixed maturity period i.e. from 2 to 15 years. Need to be invested at the initial issue and you can buy / sell units on the stock exchange thereafter.
Interval schemes: This scheme is a combination of features which is both close ended and open ended. They may be traded in the stock exchange, open for sale or redemption at NAV related prices in predetermined intervals.
Growth Mutual fund: This scheme will provide you capital appreciation in medium / long term. Under this scheme the majority of the funds will be invested in equities even if there is a short term decline in anticipation of future appreciation.
Growth mutual fund is useful for people who want to invest in long term gains and is not for those who seek regular income or short term gains.
Income schemes: Under this scheme you can hope for regular and steady income. The funds will be usually invested in fixed income securities such as corporate debentures and bonds. However there is a limited scope for capital appreciation in these schemes. This scheme is ideal for retired people and for those who regular income.
Balanced schemes: These schemes provide capital growth as well as periodical income they earn to the investor. They would invest a part of the fund in stocks and rest in the fixed income securities as mentioned in the offer documents. These schemes would be ideal for those who seek moderate growth and income.
Money market / liquid schemes: This scheme has multiple benefits. It offers easy liquidity, capital preservation and moderate income. Here the funds are invested in safer and short term instruments. Under there schemes returns may be fluctuating from time to time depending upon the interest rates in the market.
Tax saving schemes: These are also known as tax mutual funds since they are mainly focus on saving tax. Tax incentives are offered to the investors under tax laws to promote long term investments in equities in terms of mutual funds.
Tax mutual funds are ideal for people who seek tax incentives.
Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition
Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition
- ISBN13: 9780470138137
- Condition: New
- Notes: BRAND NEW FROM PUBLISHER! BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed
John C. Bogle shares his extensive insights on investing in mutual funds
Since the first edition of Common Sense on Mutual Funds was published in 1999, much has changed, and no one is more aware of this than mutual fund pioneer John Bogle. Now, in this completely updated Second Edition, Bogle returns to take another critical look at the mutual fund industry and help investors navigate their way through the staggering array of investment alternatives that are available to them.
Written in a straightforward and accessible style, this reliable resource examines the fundamentals of mutual fund investing in today’s turbulent market environment and offers timeless advice in building an investment portfolio. Along the way, Bogle shows you how simplicity and common sense invariably trump costly complexity, and how a low cost, broadly diversified portfolio is virtually assured of outperforming the vast majority of Wall Street professionals over the long-term.
- Written by respected mutual fund industry legend John C. Bogle
- Discusses the timeless fundamentals of investing that apply in any type of market
- Reflects on the structural and regulatory changes in the mutual fund industry
- Other titles by Bogle: The Little Book of Common Sense Investing and Enough.
Securing your financial future has never seemed more difficult, but you’ll be a better investor for having read the Second Edition of Common Sense on Mutual Funds.
List Price: $ 29.95
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Posted in Mutual Funds | 10th, Anniversary, Common, Edition, Fully, Funds, Mutual, Sense, Updated | Leave a commentMutual Fund Investment For Nris In India- What Do You Need To Know?
Are you an NRI and looking to invest in mutual funds in India? Read on, this article will guide with some of the options available to you in India to help you in choosing the right one. Mutual fund investment has gained momentum in India over past few years and it is a wise decision to invest in mutual funds for getting good returns.
Of late, India has emerged as one of the most productive place for investment across the globe. The reason why more and more people want to invest their money in India is because of the fast growth which India is witnessing in the recent time.
The economical grow quite evident with the kind of confidence the investors are showing towards India as a major investment hub.
With so many investors wanting to invest their money in mutual fund India, it surely has become the spotlight of investing map in the world. The investors feel that their money is in the safe hands as mutual funds carry minimal risks when compared to equities and therefore it is a good bet for long term gains.
People of Indian origin / NRIs are eligible to invest in mutual funds in India after taking general permission from Reserve Bank of India.
Huge capital returns are encouraging more and more NRIs to invest in mutual funds of late and the results are also overwhelming.
So how do you go about your investing your money in mutual funds in India? Just read rest of the article.
As per the provisions of schedule 5 of the foreign exchange management an NRI can invest in most of the mutual funds India offers.
How can NRI invest in mutual funds?
An NRI can invest in mutual fund schemes in India through the money lying in the credit of NRE/NRO account or may be through banking channels which are approved by the authority.
All you’ll need to do to invest in mutual fund is by submitting a duly completed application form along with cheques or DD to investor service center.
To invest on mutual funds, it is compulsory to have an NRE bank account. General permission has been granted by the Reserve Bank of India to offer mutual fund, subject to few conditions.
These conditions are:
The investment amount has to be received by inward remittance through normal banking channels or through debit to an NRE Bank account of the investor.
The net amount of the interest or dividend and proceeds of units should be remitted through normal banking channels or be credited to NRE bank account of the investor as mentioned by him / her with a condition of payment of applicable tax.
Tax liability for income received from NRI mutual fund:
Section 10 (35) of Income tax Act, 1961 defines that income received from mutual fund investment under section 10 (23D) is exempt from income tax. Therefore all dividends are tax free on NRI mutual fund held by the investor. However any tax that is applicable will be deducted at source.
Mutual Funds For Dummies (For Dummies (Business & Personal Finance))
Mutual Funds For Dummies (For Dummies (Business & Personal Finance))
- ISBN13: 9780470623213
- Condition: New
- Notes: BRAND NEW FROM PUBLISHER! BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed
Position your portfolio for growth with one of America’s bestselling mutual fund books
Indicators are pointing to a rebound in mutual funds, and investors are returning! Newly revised and updated, Mutual Funds For Dummies, 6th Edition, provides you with expert insight on how to find the best-managed funds that match your financial goals. With straightforward advice and a plethora of specific up-to-date fund recommendations, personal finance expert Eric Tyson helps you avoid fund-investing pitfalls and maximize your chances of success.
- This revised edition features expanded coverage of ETFs, fund alternatives, and research methods
- Tyson provides his time-tested investing advice, as well as updates to his fund recommendations and coverage of tax law changes
- Sample fund portfolios and updated forms show you exactly how to accomplish your financial goals
Pick the best funds, assemble and maintain your portfolio, evaluate your funds’ performance, and track and invest in funds online with Mutual Funds For Dummies, 6th Edition!
List Price: $ 19.99
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Comprehensive Guidance For Gauging The Top Mutual Funds In India
Mutual Fund Playas
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the mutual fund gangstas @ the tiki
Mutual funds are basically instruments for investing money. People want to invest their money in top mutual funds and allow their money to grow. It is because the bank rates have fallen down considerably in last few years. If you want to increase the value of your money over a period of time, then investing on mutual funds is a wise decision.
However, it is crucial to understand where and how we are investing our own hard earned money. Someone has truly said “Spend like a child, Offer like young and save like elderly people”. When you try saving your money, you will need to have wisdom and lot of patience. You will also need to be very careful.
Stock market investments are one the best ways to save money. However, not every investor is well informed about the volatile market situation and may land up in heavy losses. Mutual funds are therefore considered to be the best option where the fund manager does it all for you.
There are lots of mutual funds in India offering various options to invest your money. Mutual funds are cost effective and very efficient. Investors can purchase or sell stocks at a much cheaper rate through mutual funds. You may not be able to get lower trading costs if you tried selling or buying stocks on your own.
The biggest advantage of mutual funds is that it provides diversification. Mutual funds in India are divided into the following types:
• Open-end Funds – Money which is raised from the shareholders and invested in a group of assets is known as open-end funds.
• Closed-End Funds – The number of shares issued is fixed through an initial public offering in closed-end funds.
• Large-Cap Funds – In this type of funds money is invested in large blue chip companies.
• Mid-cap Funds – Money is invested in medium sized or small sized companies in this kind of mutual fund.
• Balanced Funds – Mutual funds that buys a combination of short-term bonds, preferred stocks and common stocks is known as balanced or hybrid funds.
• Equity Funds – In this type of fund the pooled amount of money from the public companies is invested. It is also known as stock mutual funds.
• Growth Funds – In this type of mutual funds capital appreciation by investing in growth stocks is the main aim.
• No load Funds – Load funds and No Load funds are two types of mutual funds.
• Exchange Traded Funds – Unlike conventional mutual funds, ETF’s are traded on an exchange.
There are few other classifications also like the International mutual funds, index funds, sector funds, regional mutual funds or money market funds. You can find the list of top mutual funds and then invest money in those. These days information is readily available on any of the newspapers, financial magazines, news and finance websites etc.
Mutual fund investments get affected by the volatility of the market activity. Inflation, interest rate changes and the economic scenario largely affects the mutual funds.
Some of the top mutual funds companies in India are:
• Reliance Mutual Funds
• ICICI Prudential
• HDFC
• DSP Merrill Lynch
• SBI Mutual Funds
• Franklin Templeton
• Sundaram BNP Paribas
You will need to keep a track of latest market value of mutual funds in India if you want to invest money in mutual funds. Saving is the best way to prepare you for the future.