Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 35 views

    Unit - 4 Mutual Funds Credit Rating

    Uploaded by

    Karthick Naik
    Mutual funds pool money from investors and invest it in a variety of securities like stocks, bonds, and money market instruments. The key advantages are professional management, diversification, convenience, and low costs. Some disadvantages include lack of control over costs and inability to tailor portfolios. Credit ratings are assigned by agencies and indicate the ability of companies or governments to meet financial obligations. Ratings help investors assess risk and return and provide transparency around an issuer's creditworthiness.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    Unit - 4 Mutual Funds Credit Rating

    Uploaded by

    Karthick Naik
    35 views10 pages
    Mutual funds pool money from investors and invest it in a variety of securities like stocks, bonds, and money market instruments. The key advantages are professional management, diversification, convenience, and low costs. Some disadvantages include lack of control over costs and inability to tailor portfolios. Credit ratings are assigned by agencies and indicate the ability of companies or governments to meet financial obligations. Ratings help investors assess risk and return and provide transparency around an issuer's creditworthiness.

    Original Description:

    finance related

    Original Title

    Unit-3 Mutual Funds[1]

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Mutual funds pool money from investors and invest it in a variety of securities like stocks, bonds, and money market instruments. The key advantages are professional management, diversification, convenience, and low costs. Some disadvantages include lack of control over costs and inability to tailor portfolios. Credit ratings are assigned by agencies and indicate the ability of companies or governments to meet financial obligations. Ratings help investors assess risk and return and provide transparency around an issuer's creditworthiness.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    35 views10 pages

    Unit - 4 Mutual Funds Credit Rating

    Uploaded by

    Karthick Naik
    Mutual funds pool money from investors and invest it in a variety of securities like stocks, bonds, and money market instruments. The key advantages are professional management, diversification, convenience, and low costs. Some disadvantages include lack of control over costs and inability to tailor portfolios. Credit ratings are assigned by agencies and indicate the ability of companies or governments to meet financial obligations. Ratings help investors assess risk and return and provide transparency around an issuer's creditworthiness.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 10

    Unit - 4 Mutual Funds credit rating

    Definition of Mutual Funds


    a fund established in the form of a trust by a sponsor, to raise monies by the trustees through the sales of units to the public, under one or more schemes, for investing in securities in accordance with the regulations Meaning of Mutual Funds
    Collect the saving from small investors, invest them in government and other corporate securities and earn income through interest and dividends, besides capital gains
    Form of trust that pool the funds of a whole lot of investors to make more money by investing in an array of financial instruments. A small drops of water make a big ocean

    History of MF
    1964-UTI 1987- Public Sector banks, Insurance Companies SBI, Canbank, PNB LIC, GIC 1993- Private Sector Kothari Pioneer ( later merged with Franklin Templeton), J P Morgan, Morgan Stanley, George Soros and Capital International

    Mutual Fund Operations

    Important characteristics of a Mutual Fund


    The ownership is in the hands of the investors who have pooled in their funds.

    It is managed by a team of investment professionals and other service providers.


    The pool of funds is invested in a portfolio of marketable investments. The investors share is denominated by units whose value is called as Net Asset Value (NAV) which changes everyday. The investment portfolio is created according to the stated investment objectives of the fund.

    Advantages & Disadvantages of Mutual Funds


    Professional Management Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Choice of schemes Tax benefits Well regulated

    No control over the costs. Regulators limit the expenses of Mutual Funds. Fees are
    paid as percentage of the value of investment. No tailor made portfolios.

    Managing a portfolio of funds. ( Investor has to hold a portfolio for funds for different objectives ).
    ( All these disadvantages can also be treated as advantages of direct equity over Mutual Funds)

    Types of Mutual Fund

    On the basis of yield & investment pattern

    On the basis of execution & operation

    INCOME FUND GROWTH FUND BALANCE FUND SPECIALISED FUND MONEY MARKET MUTUAL FUND

    Closed Ended

    Open Ended

    TAXATION FUND LEVERAGED FUND DUAL FUNDS INDEX FUND BOND FUNDS AGGRESSIVE GROWTH FUND OFF-SHORE MUTUAL FUNDS PROPERTY FUND FUND OF FUNDS

    CREDIT RATING
    MEANING ratings are designed exclusively for the purpose of grading bonds according to their investment qualities credit rating is an unbiased and independent opinion as to issuers capacity to meet its financial obligations. It does not constitute a recommendation to buy/sell or hold a particular security

    Functions of credit rating


    Superior information Low cost information Basis for a proper risk-return trade off Healthy discipline on corporate borrowers Formulation of public policy guidelines on institutional investment

    Benefits of credit rating


    Sources of additional certification Increase the investors population Forewarns risks Encourages financial discipline Merchant bankers job made easy Foreign collaborations made easy Benefits the industry as a whole Low cost of borrowing Rating as a marketing tool

    Credit Rating Agencies in India


    Credit Rating Information Service Limited

    CRISIL CARE DCR India ONICRA

    Investment Information And Credit Rating Agency Of India - ICRA

    Credit Analysis And Research Duff Phelps Credit Rating Private Limited Onida Individual Credit Rating Agency Limited -

    Credit Rating symbol


    High investment grades AAA (Triple A) AA (Double A) Investment Grades A BBB (Trible B) Specualative Grades BB (Double B) B c D _ Highest Safety High Safety Adequate Safety Moderate Safety Inadequate Safety High Risk Substantial Risk Default

    You might also like