Prajna Capital - An Investment Guide

What is a Mutual Fund? A mutual fund is a pool of money put together by a group of investors, who stand to benefit or loose from that pool to the extent they have invested. This pool is created since small individual investments have limited power and ability to influence the outcome of the investment. On the other hand, when the investment is large, the investor can have greater control on the outcome of the investment. Thus, many small investors gather their individual small investments into a larger investment to take advantage of the opportunities offered by large investments. This is called a mutual fund. What does the Mutual fund invest in? Mutual funds can be created for investing in anything. The investments that the mutual fund is going to make are discussed in the mutual fund's offer document. Typically, mutual funds invest in investment opportunities that have a trading market around it, such as stocks and shares, bonds and debentures, etc. How does the investors benefit...

Many people today find that they are deluged with information about investing. News programs provide updates on the stock market several times a day. Through the Internet, individuals can check on the performance of their investments at the click of a mouse. But one of the key sources of investment information, and one that some investors may be tempted to overlook, is the Mutual Fund Offer Document . A mutual fund offer document is a legal document that must adhere to standards set forth by the Securities Exchange Board Of India ( SEBI ), the regulatory agency that oversees the Indian Mutual Fund industry. The information contained in the prospectus is intended to help you understand what types of securities a fund invests in and the investment philosophy that the Investment Manager uses in selecting individual securities for the fund. The offer document will also provide information on the fund’s income and expenses, a review of historical performance, and information about your abil...

Where can an investor get a form for applying/ bidding for the shares? The form for applying/bidding of shares is available with all syndicate members, collection centers, the brokers to the issue and the bankers to the issue. These are also available with your friendly neighborhood news paper vendors and sub brokers. How are offer documents prepared? The offer documents such as prospectus etc. are prepared by an independent entity know as Merchant Banker, which is registered with regulatory authority SEBI. They are required to carry out due diligence while preparing an offer document. The draft offer document submitted to SEBI is put on website for public comments. Is it compulsory for an investor to have a Demat Account? All the public issues of size in excess of Rs.10 crore, are to made compulsorily in the demat more. Thus, if an investor chooses to apply for an issue that is being made in a compulsory demat mode, he has to have a demat account and has the responsibility to put the...