Skip to main content

MUTUAL FUND SCHEMES BASED ON INVESTMENT OBJECTIVE

Image
By

Income Oriented Mutual Fund: These funds offer a fixed income to investors and it has lower risk as compared to growth funds. Under this scheme, the Asset Management Company invests funds income oriented schemes like Bonds, Debentures, Government Bonds & securities and commercial papers.

Features:

(i) These schemes are generally have lesser risk as compared to Growth schemes.

(ii) These schemes give fixed income. 

Growth oriented Mutual Fund: These funds offer capital appreciation over a period. Under this scheme, the Asset Management Company invests funds in the equity shares which have significant growth potential. Despite good return under this mutual fund scheme, there is no assurance or guarantee of return. In other words, it is a scheme which has high risk and high return.

Features:

(i) High risk and High Return.

(ii) No Guarantee or assurance for return.

(iii) The objective of this fund to get High capital appreciation. 

Hybrid Mutual Funds/Balanced Mutual Funds: These funds have features of income oriented funds and growth oriented funds. 

Example: HDFC Prudence, an equity oriented hybrid fund under this scheme, the Asset Management Company invests the entries funds in types of securities:

(i) Equity shares, and

(ii) Bonds & Fixed income oriented instruments. 

High Growth Schemes: These funds primarily invest in high risk and high return volatile securities in the market and induce the investors with a high degree of capital appreciation. 

Capital Protection Oriented Scheme: It is a scheme which protects the capital invested in the mutual fund through suitable orientation of portfolio structure.

Comments

Post a Comment

Popular posts from this blog

BANKING BACKGROUND AND ITS GROWTH:

By
BANKING BACKGROUND AND ITS GROWTH For having a healthy economy there has to be a sound and effective banking system. The banking system of India should be able to meet new challenges posed by the technology and any other internal and external factors. For the past three decades several significant achievements have been observed in Indian banking system especially towards credit facilities. In fact, Indian banking system has reached gradually to remote places of the country also. The government’s regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks in India. The first bank in India (although conservative/rigid) was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct stages. Stage-I:  Early phase from 1786 to 1969 of Indian Banks. Stage-II: Nationalization of Indian Banks and unto 1991 prior to Indian banking sector reforms. Stage-III:   New ...
3 comments
Read more

MORTGAGE BACKED SECURITIES

By
Mortgage – backed securities (MBS) are bonds secured by home and other real estate loans. They are created when a number of these loans, usually with similar characteristics, are pooled together. These securities assure a fixed return which is derived from the performance of the specific assets. They are issued with a maturity period of 3 to 10 years and backed by pooled assets like mortgages, credit card receivables, etc.  Example: A bank offering home loan might round up Rs.20 crore worth of such loans. That pool is then sold to a Government Agency or a government sponsored – enterprise (GSE), or to others to be used as the collateral for the new MBS.  Features of assets to be securitized: The assets to be securitized shall have the following features:- (a) The cash flows generated from the assets should be received periodically in accordance with a Pre – determined schedule. (b) The actual cash flows generated from the assets should be predictable. (...
Post a Comment
Read more

HEDGE FUNDS

By
Hedge means Fence, Barrier & Hurdle (other meaning – Protection & Security). In other words, it is a process of reducing and controlling future risk by taking some steps in advance.  Hedge fund refers to an alternative investment vehicle that is designed to protect investment portfolios from market uncertainty, while generating positive returns in both up and down markets. Hedge funds are unregistered private investment partnerships, funds or pools that may invest and trade in many different markets, strategies and instruments (including securities, non – securities and derivatives) to provide certain periodic and standardized pricing and valuation information to investors.  In short, it is an alternative investment that is designed to protect the Capital (investment amount) of an investor from market uncertainty and generate positive returns from the market fluctuations.  What is Hedging Concept?  Case Study: STEEL INDUSTRY  Facts: An...
Post a Comment
Read more