...Banking Southern University, Bangladesh. MUTUAL FUND MANAGEMENT PRACTICES IN BANGLADESH MUTUAL FUND: Mutual fund are Non-banking or, non depositary financial intermediaries that gather funds from the saving and investing public and utilize the accumulated pool of funds by investing in stocks, bonds, currencies, futures and options contracts or a variety of other financial instruments . A key elements in any mutual fund is its ability to provide the investors with professional management of their funds along with other professional services such as record keeping, custodial services and prompt dissemination of information. Mutual Funds refers to a fund, managed by an investment company with the financial objective of generating high Rate of Returns. These asset management or investment management companies collects money from the investors and invests those money in different Stocks, Bonds and other financial securities in a diversified manner. Before investing they carry out thorough research and detailed analysis on the market conditions and market trends of stock and bond prices. These things help the fund mangers to speculate properly in the right direction. Mutual funds are portfolios of different securities such as stocks, bonds, treasuries, derivatives, etc. Mutual funds pool money of both individual and institutional investors allowing the funds to achieve: (i) economies of scale by reducing costs and increasing investment returns;...
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...Banking Southern University, Bangladesh. MUTUAL FUND MANAGEMENT PRACTICES IN BANGLADESH MUTUAL FUND: Mutual fund are Non-banking or, non depositary financial intermediaries that gather funds from the saving and investing public and utilize the accumulated pool of funds by investing in stocks, bonds, currencies, futures and options contracts or a variety of other financial instruments . A key elements in any mutual fund is its ability to provide the investors with professional management of their funds along with other professional services such as record keeping, custodial services and prompt dissemination of information. Mutual Funds refers to a fund, managed by an investment company with the financial objective of generating high Rate of Returns. These asset management or investment management companies collects money from the investors and invests those money in different Stocks, Bonds and other financial securities in a diversified manner. Before investing they carry out thorough research and detailed analysis on the market conditions and market trends of stock and bond prices. These things help the fund mangers to speculate properly in the right direction. Mutual funds are portfolios of different securities such as stocks, bonds, treasuries, derivatives, etc. Mutual funds pool money of both individual and institutional investors allowing the funds to achieve: (i) economies of scale by reducing costs and increasing investment returns;...
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...Question 1 For 4 Dow Jones stocks for a 15 year period, compute quarterly realized betas from daily data. Find firm specific and macroeconomic variables that help explain quarterly beta. Answer 1.1 Factors Introduction Factor model survey the sensitivity of a stock return as a function of one or more factors. There are single-factor and multi-factor models. In factors model, based on the type of factors used, it can be classified to economic and fundamental factor models. Economic factor models use macroeconomic and financial markets variables as factors, while fundamental factor models use firm-specific microeconomic variables, such as financial indicators. In recent research shows that the change in macroeconomic factors could be reflected in the change of systematic risk which impacts a stock’s expected return (Humpe & Macmillan 2007). Macroeconomic factors included industry production index, CPI, GDP, unemployment rate, inflation rate, risk premium, default premium, business cycle index and so on. From Chen (1986) notable study which uses variables include industrial production, inflation, risk premium, term structure, market index, consumption and oil prices to found out that industrial production, unanticipated change in the risk premium, unanticipated inflation, and, a slightly weaker, the unanticipated change in term structure, are the most important factors affecting expected stock returns. The 15 macroeconomic variables used as factors in our model are...
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...Australian Funds Management Industry Overview Australia holds one of the largest and fastest growing funds management sectors in the world. This growth and strength is underpinned by: • A government-mandated retirement scheme (superannuation), increasing progressively from 9 per cent to 12 per cent by 2019-2020. • A $1.2 Trillion existing pension fund pool; the 4th largest in the world. • A total $1.7 Trillion funds management industry (the largest in Asia-Pacific) • A unique 410,000 + strong investment community of self managed super funds (accounting for one third of the nation’s pension fund pool) With these figures representing a Compound Annual Growth rate (CAGR) of 11.9% since 1994, Australia’s total Funds Under Management (FUM) is: • 20% larger than the market capitalisation of the entire domestic equity market ($1.403 trillion) • A 135% of the Australian nominal GDP With forecasts stipulating that by 2015, Australia’s total FUM will reach $1.979 trillion, the continued changing sophistication and asset allocations of investors coupled with the robust underlying sector fundamentals has created opportunities for the launch of new funds in niche the areas of infrastructure, direct property and global macro trading. Current Opportunities In light of the consequences of ageing populations in virtually all developed counties and unstainable government debt levels, pension...
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...COST CONCEPT IN ACTIVE AND PASSIVE MANAGEMENT Name: Institution: Role and risk & cost concept in active and passive management Active and passive management are the two classes in which the investment strategies are categorized. Active management is whereby financial professionals try to outperform a specific benchmark. Passive funds like the exchange traded funds (ETFs) are whereby the index is tracked with no active stock selection (Barr, 2009). The risk of a failing a benchmark or index can be reduced through passive investment. Passive investment also reduces the cost. The active investment has the potential of boosting returns through outperforming some benchmarks. However, there are increased risks and also there are no guarantees that the benchmarks will be exceeded or matched. In a well-diversified portfolio, active and passive investment can flourish. The role of ETFs which is an important building block for dynamic and diverse portfolios is to offer access to equities and fixed income across large developed economies and the emerging markets. ETFs can be traded like share, thus similar liquidity is offered hence it allows the investor to adjust to their portfolios. In the context of investors’ specific objective, active management allows risks to be managed properly (Barr, 2009). Passive funds don’t neutralize risks, but they introduce benchmark risks and concentrated risks to investors and in relation to exchange-traded fund. The concept of market efficiency...
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...and investment trusts. Firstly, it will shortly introduce the definitions of two different funds, then after identifying the main difference between them, it will talk about the advantages and disadvantages for each other. Finally, it will come up with a conclusion. Unit trusts and investment trusts are two types of funds that people can invest in as a private investor in the world. They together form the very fundamental way of how funds operate. Unit trusts are‘open-ended’funds, which means that the size of the fund and the number of units depends on the amount of money investors put into the fund.(Arnold,2012:30) Moreover unit trust fund is an investment scheme where money from many investors is pooled together for collective investments, and is invested towards a specified goal as stated in the investment objective of the fund.(Fig1.1) (ambmutual.com) Arnold(2012) also claimed that investment trusts differ from unit trusts-they are companies able to issue shares and other securities rather than units. Investors can purchase these securities when the investment company is first launched or purchase shares in the secondary market from other investors. These are known as closed-end funds because the company itself is closed to new investors – if you wished to invest your money you would go to an existing investor to buy shares and not buy from the company. An open-end fund does not restrict the amount of shares that can be issued or redeemed at any time. Usually,...
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...COST CONCEPT IN ACTIVE AND PASSIVE MANAGEMENT Name: Institution: Role and risk & cost concept in active and passive management Active and passive management are the two classes in which the investment strategies are categorized. Active management is whereby financial professionals try to outperform a specific benchmark. Passive funds like the exchange traded funds (ETFs) are whereby the index is tracked with no active stock selection (Barr, 2009). The risk of a failing a benchmark or index can be reduced through passive investment. Passive investment also reduces the cost. The active investment has the potential of boosting returns through outperforming some benchmarks. However, there are increased risks and also there are no guarantees that the benchmarks will be exceeded or matched. In a well-diversified portfolio, active and passive investment can flourish. The role of ETFs which is an important building block for dynamic and diverse portfolios is to offer access to equities and fixed income across large developed economies and the emerging markets. ETFs can be traded like share, thus similar liquidity is offered hence it allows the investor to adjust to their portfolios. In the context of investors’ specific objective, active management allows risks to be managed properly (Barr, 2009). Passive funds don’t neutralize risks, but they introduce benchmark risks and concentrated risks to investors and in relation to exchange-traded fund. The concept of market efficiency...
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...23 1. Mutual funds are attractive to small investors because they are able to diversify their portfolio for a minimum investment of $250 to $2,500 (p. 609). The investors must rely on the fund’s portfolio manager to make the investment decisions though. Mutual funds generate returns in three ways: through dividend payments to shareholders, distribute capital gains resulting from the sale of securities within the fund, and through mutual fund share price appreciation (p. 611). 2. Open-end mutual funds differ in the fact that they are open to investors which means they will sell shares to investors at any time (p. 609). They also allow investors to sell the shares back to the fund at any time which closed-end cannot (p. 609). 3. Load funds are promoted by registered representatives of brokerage firm, who earn a sales charge upon the investments in the fund between 3 and 8.5 percent (p. 615). No-load funds are promoted strictly by the mutual fund of concern, thereby avoiding an intermediary (p.615). 6. The ideal mutual fund for investors who wish to generate tax-free income and a low degree of risk would be a short-term municipal bond fund (p.620). 9. If the mutual fund distributes at least 90 percent of its income to its shareholders, the fund itself is exempt from federal taxation (p.625). 11. Money market funds differ from other types of mutual funds based on the composition, maturity, and risk of their assets (p. 625). The most common money market funds are commercial...
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...ARTICLES BY AUTHOR Superior performance has helped Neuberger Berman survive and thrive since the Lehman Brothers bankruptcy. Neuberger Berman was knocked around more than most asset managers in the treacherous seas of the 2008 financial crisis. The 73-year-old firm had only recently been 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...
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...The Mutual Fund At a basic level, mutual funds are nothing more than a collection of stocks and bonds. A mutual fund primarily focuses on bringing groups of people together to invest their money into bonds, stocks, and other different securities. It’s important to know that each of these gathered investors owns shares that ultimately make up a portion of the holdings in the total fund. Once a person invests into these stocks, bonds, or securities through the mutual fund they can make money in three different ways. One being if the fund sells a security that increases in price then it has a capital gain. If a capital gain occurs then most funds forward these gains to investors in a distribution. Another way investors make money through mutual funds is if fund holdings’ price rises but is not sold by the fund manager. The fund’s shares increase and one can sell their mutual fund shares for a profit. The third way an investor can make a profit is when income is earned from the interest on bonds and from the dividend on stocks. The fund pays out almost all of the income it receives throughout the year to fund owners in a distribution. Mutual funds not only have great benefits on a profitable level but also have many other perks to them. Most importantly, mutual funds provide professional management of the investors’ money. Most investors purchase funds because they either don’t have the time or the expertise to thoroughly manage their own portfolios. This is a great way for...
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...Investment Funds and Securities Bloomberg Exercises 1. Learn about the different types of funds and their classifications by going to the Bloomberg’s FUND screen: FUND <Enter>; click “Fund Functions” and “Fund Lookup”; or enter MFOD and click type: Equity, Debt, Money Market, Real Estate, Commodity, or Alternative. 2. The performances of funds by type (e.g., mutual, hedge fund, ETFs, and unit investment trust) can be found on the Fund Heat Map Screen, FMAP. Use the screen to identify the top performers based on total return for several types: FMAP <Enter>, Click “Fund Type” in “View By” dropdown. 3.) alternative) can be found on Bloomberg’s Fund Heat Map Screen, FMAP. Use the screen to identify the top performers based on total return for several objectives: FMAP <Enter>, Click “Objective” in “View By” dropdown. 4. Use the Bloomberg fund search screen, FSRC, to search for the following types of equity-type funds and ETFs: a. Fund Type: Open-End; Classification (Asset Class Focus): Equity; Fund Strategy: Growth or Growth and Income; Analytic criterion: Input total return for one year of greater than X% (e.g., 20%) b. Fund Type: Closed-End; Classification (Asset Class Focus): Equity; Country of Domicile: select (e.g., U.S.); Analytic criterion: input total return for one year of greater than X% (e.g., 20%) c. Fund Type: Open-end; Classification: Industry Focus: Select industry (e.g., technology); Analytic criterion: input total return for one...
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...Business Management Dynamics Vol.2, No.2, Aug 2012, pp.01-09 Indian Investor’s Perception towards Mutual Funds Dr. Nishi Sharma1 Abstract The concept of mutual fund emerged in Netherlands in 18th century and introduced in India by Unit Trust of India in1960s. As the mutual fund industry provides an option of diversified investment structure with varying degree of risk, it was supposed to be the most lucrative market for Indian investors. It was believed that it will surely tap the savings of common man. But in practice it failed to become a primary choice for investment to Indian investor. During almost six decades (1965-2011) the value of assets under management of mutual fund industry experienced great swings. As against the developed countries where almost every second investor is a mutual unit holder, the product could not get much popularity in India. In this reference, the present paper attempts to investigate the reasons responsible for lesser recognition of mutual fund as a prime investment option. It examines the investor’s perception with reference to distinct features provided by mutual fund companies to attract them for investing in specific funds/schemes. The study uses principal component analysis as a tool for factor reduction. The paper explored three factors named as fund/scheme related attributes, monetary benefits and sponsor’s related attributes (having respectively six, four and four variables) which may be offered to investors for securing their patronage...
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...about the products of the company and their position in the market. The Mutual fund is one of them who are performing their works very effectively. As we are the students of BBA department, we have to learn about the mutual fund investment system analysis of a firm. That’s why we have decided to analysis on mutual fund that renown in the world. 1.1 Origin of the Report This report is a part of “Investment Management” course under the BBA curriculum. As we are the students of BBA department, we have to learn about the financial system analysis of financial firms. That’s why we have decided to analysis on mutual fund. 1.2 Objectives • To improve our knowledge • To make us experienced • To develop our skill. • To provide brief information about our analysis 1.3 Problem and Purpose 1.3.1 Problem Statement This report seeks to address the following requirement: “To study about the mutual fund, its overall process analysis followed by firm. 1.3.2 Purpose of the Report The objective of the report is- “To acquire the practical knowledge of Mutual fund analysis followed by the firm. 1.4 Scope and Limitation 1.4.1 Scope This paper includes financial system in Bangladesh. Then Structure of Financial System, History of Bangladesh Capital Market, mutual funds, types of mutual fund schemes, set up of mutual fund, invest in mutual fund and rights of a mutual funds holder. • Our time was short • We are not experienced •...
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...Report On “Mutual Funds and their role in portfolio management” Submitted in partial fulfillment of the requirement of Certification Course in Capital and Financial Markets Submitted by: Name: Karthik L.Reddy Roll No. 5 OCPCFM Batch June 2012 Under the Guidance of: Dr. J. Symss Indian Institute of Foreign Trade New Delhi 1 INDEX Serial No. 1 2 Executive summary Objectives Introduction Advantages and Disadvantages Types of Funds Managing a portfolio of funds MF industry in India Topic Page Numbers 4 5 6 9 12 15 21 26 27 28 4 Chapters 5 6 7 Conclusion References Appendix 2 APPENDIX Appendix No. Appendix 1 Appendix 2 Appendix 3 Description Major MF Companies in India and Top Funds Introduction to AMF India Knowing the Prospectus Page Numbers 28 31 33 3 EXECUTIVE SUMMARY This report – “Mutual Funds and their role in portfolio management” would help the readers take advantage of an excellent investment vehicle: mutual funds — the best of which offer you diversification, which reduces your risks, and low-cost access to outstanding money managers, who boost your returns. The topic has been chosen to provide a detailed introduction to the world of mutual funds along with the jargon associated with it, the various types of mutual funds available in today’s market. Mutual funds play a vital role in any investment portfolio. So managing a portfolio of funds becomes very critical for any investor – small or big, short-term or long-term...
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...STOCKHOLM SCHOOL OF ECONOMICS Master thesis within Finance Evaluating the Performance of Socially Responsible Investment Funds: A Holding Data Analysis H. Camilla Stenström* Jessica J. Thorell** Abstract: This paper investigates the performance of regular mutual funds compared to Socially Responsible Investment (SRI) mutual funds, over the time period of January 2001 to September 2007. The paper extends the research on the performance of SRI funds by using holding data of regular funds to create replicating portfolios. In the replicating portfolios, unethical investments are excluded according to a norm-based screening list, hence creating artificial SRI funds. The replicating portfolio returns are then used as a benchmark to compare against the SRI funds’ and regular funds’ returns. Results from the study indicate that an exclusion of companies according to norm-based screening can improve a fund’s performance. However, when looking specifically at the fund management of SRI funds, the results point towards inferior performance compared to regular funds. Key Words: Socially Responsible Investment (SRI) funds, ethical investments, holding data analysis, norm-based screening PhD Stefan Engström 13:15-15:00, December 14, 2007 Room 349, Stockholm School of Economics Tutor: Presentation: Venue: * 19873@student.hhs.se ** 19924@student.hhs.se H.C. Stenström and J.J. Thorell ACKNOWLEDGEMENTS Special thanks to tutor PhD Stefan Engström for all support and guidance...
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