Prajna Capital - An Investment Guide

Deutsche Mutual Fund has filed an offer document with market regulator the Securities and Exchange Board of India ( SEBI ) for the launch of its DWS Gold Advantage Fund. If the fund, which is an open ended debt fund, sees the light of day, then it would be the first of its kind fund in this fund house’s family. The fund expects to generate income by investing in a fixed income securities and capital growth by investing in gold related securities. The fund may invest up to 100 per cent in money market instruments and cash while it would invest up to 35 per cent in Gold ETFs. The fund would be benchmarked against Gold Index (35 per cent) and Bond Index (65 per cent). The fund offers both growth and dividend options. The fund would be managed by Avnish Jain who has over 15 years of experience in financial markets. He holds a B.Tech (Homs) IIT, Kharagpur and PGDM – IIM, Kolkata. He is also the fund manager of DWS Gilt Fund and DWS Fixed Term Fund - Series 68. The minimum application amoun...

The expense ratio is the total amount of annual expenses incurred by the fund. It includes: The management fee and Operating expenses like the registrar and transfer agent fee, audit fee, custodian fee, marketing and distribution fee. These expenses are divided by the assets under management. Simply put, the expense ratio is the per unit cost incurred in managing the fund. The net asset value ( NAV ) which you see daily is calculated after deducting these expenses. However, the expense ratio of a fund is disclosed only once every six months. The expense ratios of equity and debt funds differ. Since the expenses of equity funds are more than those of debt-oriented funds, the expense ratio on equity funds is greater. As per the regulations of the Securities and Exchange Board of India ( SEBI ), a mutual fund can charge a maximum expense of: · 2.5 per cent for equity funds, · 2.25 per cent for debt funds, · 1.5 per cent for index funds and · 0.75 per cent ...

Free. The word evokes a different kind of feeling than what it actually means in today’s world. Make no mistake about it, absolutely nothing is free today. Even things that are said to be free have a hidden cost to them. Wherever you read that four-letter word, the omnipresent ‘conditions apply’ will be there as well. You always pay for what you get, one way or another. A price for every product and a charge for every service. A doctor charges you for his services, a consultant charges you for telling you what you probably already know and in the same vein, a mutual fund charges you for managing your money. The Expense Ratio is also known as Annual Recurring Expenses . This basket of charges comprises the fund management fee, agent commission, registrar fees and the selling and promotion expenses. The expense ratio is disclosed every March and September and is expressed as a percentage of the fund’s average weekly net assets. A fund’s expense ratio states how much you pay a fund in per...

Use GOLD FUND to Capitalize on rising gold price - How Gold Fund works for investors keen on exploiting the yellow metal’s potential With the recent spurt in the price of gold, gold funds are looking brighter. Recently, a gold exchange-traded fund ( ETF ) touched its all-time high of Rs 1,504 on the National Stock Exchange and closed at Rs 1,503 per unit. Other gold ETFs have touched new highs as well. There has been higher buying interest in gold ETFs. The price of gold here crossed Rs 15,000 per gram. The international price is around USD 962 per ounce. Higher global gold prices, combined with the rupee going below 49 to a dollar, helped in the surge in gold prices here. Gold ETFs have delivered a handsome return of about 30 percent over last one year. Gold ETFs have the basic characteristics of mutual funds. They are traded like stocks on the exchanges. The fund is available for investments on the stock exchange, and it can be bought and sold like any stock. An ETF is norm...

Is it necessary to have account with the same DP as broker has? No. Depository / DP can be chosen by you as per convenience irrespective of the DP of your broker. Whether my broker can also act as a DP? Yes he can. In fact most of the brokers are also registered as a depository participant so that they offer both the services and you also get the benefit of synergy in operations. However it is not compulsory for you to open a DP account with your broker. Whether depository participants are governed by any Rules and Regulations? Depository participants are governed by SEBI Act, 1992, Depositories Act, 1996, Securities and Exchange Board of India [Depositories and Participants] Regulations, 1996, Rules, Regulations and Bye laws of the respective depository with which he is registered as well as various directives of SEBI and depository issued from time to time. What are the documents to be signed with depository participant? Before opening an account with a depository participant, you ar...

This post will help you in understanding what AMFI is about, who should go for this certification, training material and preparation guidelines. AMFI is an apex body of all Asset Management Companies (AMC), which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. About Certification THE Securities and Exchange Board of India ( SEBI ) has made AMFI certification mandatory for all mutual fund agents. The Association of Mutual Funds in India ( AMFI ) runs a certification programme for agents and distributors of mutual funds. Following the SEBI notification, agen...

The Securities and Exchange Board of India in its board meeting decided to fix the structural flaw in fixed maturity plans. It was decided that no early exit will be allowed in any scheme of mutual fund in the nature of a closed-end scheme. The schemes which have been approved earlier but not yet launched will also have to be amended accordingly. It will be obligatory for the asset management company to list the close ended schemes. The board also decided that for such close ended schemes the underlying assets will not have a maturity beyond the date on which the scheme expires. This regulatory obligation will save fund managers from distress sale if investors decide to redeem their money before maturity. This is with an intent to guard the interest of the remaining investors. The order will also drive fund managers to be disciplined in building their portfolio as fund have been debarred from buying bonds of longer maturity than their own. For investors, the order will mean a comprom...

CAPITAL market regulator Securities and Exchange Board of India (SEBI) is set to revise its rules to make it mandatory for mutual funds to list close-ended schemes — both equity and debt — on stock exchanges. The proposed changes are aimed at protecting asset management companies and unit holders from the risks arising out of abrupt, heavy withdrawals by large institutional investors and to discourage early or premature withdrawals by investors. Over a month ago, several fund houses came under severe pressure after institutional investors pulled out funds owing to a liquidity squeeze. Later, the Reserve Bank of India opened a window for banks to access funds for lending to mutual funds to help them tide over the situation. These events prompted Sebi to undertake a review of the structure of MFs, especially debt schemes, taking into account the systemic risks. A review of rules relating to close-ended schemes of mutual funds is under way and the Sebi board is expected to discuss c...

Goldman Sachs Asset Management L.P. ( GSAM ), has received regulatory approval from the Securities and Exchange Board of India (SEBI) to start a wholly-owned asset management and mutual fund business in India. The senior management team appointed to spearhead the asset management operations of Goldman Sachs Asset Management in India is led by Mr. Adam Broder as Chief Executive Officer and Mr. Prashant Khemka as Chief Investment Officer. Mr. Khemka said, “It is our goal to emerge as a world class asset manager in India, by drawing synergies from our global expertise and combining them with our proven risk management techniques to deliver strong and consistent results for our investing clients. India is amongst the fastest growing economies in the world, with a robust and growing savings and investment pool.” Added Mr. Broder, “We are delighted to have received the Mutual Fund approval from SEBI so promptly. India is one of the most important countries to our Asian business and we have a...

Retail investors applying for initial public offerings ( IPOs ) of companies are expected to get a huge relief relating to refunds from such offerings. On Thursday, Securities and Exchange Board of India ( SEBI ) said an alternate payment system, aimed at mitigating time taken for refunds, would come into effect from Monday. The new system, will ensure that the money of such investors is not withdrawn from their bank accounts but are just blocked till shares are actually allotted to them. The new system, called Applications Supported by Blocked Amount ( ASBA ), will be helped by a host of SEBI-certified lenders called Self Certified Syndicate Banks (SCSBs). In the first tranche, three banks — Corporation Bank, HDFC Bank and Union Bank of India — have been allowed to act as SCSBs. “These banks will act as SCSBs in public issues which open on or after September 1 onwards,’’ SEBI noted in a release. The IPO application forms for this payment mode will be submitted to banks which have ...