8/9/2019 Knowledge Center for investors in investing http://slidepdf.com/reader/full/knowledge-center-for-investors-in-investing 1/24 Equity / Derivatives What is an Equity Share? Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs 1,00,00,000 is divided into 10,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the company then is said to have 10,00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights. What is a Stock Exchange? It is a common platform where buyers and sellers come together to transact in stocks and shares. It may be a physical entity where brokers trade on a physical trading floor via an "open outcry" system or a virtual environment. What are the functions of the Capital Market?Capital Market enhances capital formation in the economy and comprises of ± a) Primary Market ±The primary market provides the channel for sale of new securities. Primary market provides opportunity to issuers of securities; Government as well as corporates, to raise resources to meet their requirements of investment and/or discharge some obligation. b) Secondary Market ± This is a market where securities are traded after being initially offered to the public in the Primary Market and/or listed on the Stock Exchange. Majority of trading is done in this market, which comprises of equity and debt market. How does the Stock Exchange function? The stock exchanges in India, under the overall supervision of the regulatory authority, the Securities and Exchange Board of India (SEBI), provide a trading platform, where buyers and sellers can meet to transact in securities. The trading platform provided by NSE & BSE is an electronic one and there is no need for buyers and sellers to meet at a physical location to trade. They can trade through the computerized trading screens available with the trading members or the internet based trading facility provided by the trading members. What is electronic/internet trading? Electronic trading eliminates the need for physical trading floors. Brokers can trade from their offices, using fully automated screen-based processes. Their workstations are connected to a Stock Exchange's central computer via satellite using Very Small Aperture Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer and are matched electronically. How many Exchanges are there in India? Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are the country's two leading Exchanges. There are 17 other regional Exchanges recognized by SEBI, connected via the Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading via their VSAT systems. What is an Index?
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8/9/2019 Knowledge Center for investors in investing
Total equity capital of a company is divided into equal units of small denominations, each calleda share. For example, in a company the total equity capital of Rs 1,00,00,000 is divided into
10,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the company thenis said to have 10,00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights.
What is a Stock Exchange?
It is a common platform where buyers and sellers come together to transact in stocks and shares.It may be a physical entity where brokers trade on a physical trading floor via an "open outcry"
system or a virtual environment.
What are the functions of the Capital Market?
Capital Market enhances capital formation in the economy and comprises of ± a) Primary Market ±The primary market provides the channel for sale of new securities. Primary market providesopportunity to issuers of securities; Government as well as corporates, to raise resources to meet
their requirements of investment and/or discharge some obligation. b) Secondary Market ± Thisis a market where securities are traded after being initially offered to the public in the Primary
Market and/or listed on the Stock Exchange. Majority of trading is done in this market, whichcomprises of equity and debt market.
How does the Stock Exchange function?
The stock exchanges in India, under the overall supervision of the regulatory authority, theSecurities and Exchange Board of India (SEBI), provide a trading platform, where buyers and
sellers can meet to transact in securities. The trading platform provided by NSE & BSE is anelectronic one and there is no need for buyers and sellers to meet at a physical location to trade.
They can trade through the computerized trading screens available with the trading members or the internet based trading facility provided by the trading members.
What is electronic/internet trading?
Electronic trading eliminates the need for physical trading floors. Brokers can trade from their offices, using fully automated screen-based processes. Their workstations are connected to a
Stock Exchange's central computer via satellite using Very Small Aperture Terminus (VSATs).The orders placed by brokers reach the Exchange's central computer and are matched
electronically.
How many Exchanges are there in India?Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are the country's two
leading Exchanges. There are 17 other regional Exchanges recognized by SEBI, connected viathe Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading via
their VSAT systems.
What is an Index?
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An index is a stock-market indicator created as a statistical measure of the performance of anentire market or segment of a market based on a sample of securities from the market. An index
is thus a means to evaluate the overall performance of a market or of a segment of the market.An index measures aggregate market movements. Apart from being a general market indicator,
indices are used as a benchmark to evaluate individual portfolio performance. An Index
comprises stocks that have large liquidity and market capitalization. Each stock is given aweightage in the Index equivalent to its market capitalization. We have 2 renowned indices viz.(a) BSE Sensitive (BSE Sensex) and (b) S&P Nifty 50 (Nifty)
Which shares can I buy?
You can buy the shares that are listed on any of the recognized Stock Exchanges.
Whom should I contact for my Stock Market related transactions?To be able to buy or sell shares in the stock markets a client would need to be registered with a
stockbroker like standardchartered-wealthmanagers who holds membership in stock exchangesand who is registered with SEBI.
Am I required to sign any agreement with the broker or sub-broker?
Yes, you have to sign the ³Member-Client agreement´ for the purpose of engaging a broker toexecute trades on your behalf from time to time and furnish details relating to yourself to enable
the member to maintain Client Registration Form.
Why does one need a broker?As per SEBI (Securities and Exchange Board of India.) regulations, only registered members can
operate in the stock market. One can trade by executing a deal only through a registered broker of a recognized Stock Exchange or through a SEBI-registered sub-broker.
What is a Member±Client Agreement form?
This form is an agreement entered into between client and broker in the presence of witnesseswherein the client agrees (is desirous) to trade/invest in the securities listed on the concerned
Exchange through the broker after being satisfied of broker¶s capabilities to deal in the same.
How to execute an order?Select a broker of your choice and enter into a broker-client agreement and fill in the client
registration form. Place your order with your broker preferably in writing. Get a tradeconfirmation slip on the day the trade is executed and ask for the contract note at the end of the
trade date.
What is Buying and Selling?There are several types of orders that you can dictate to a broker. The most common type, which
is a regular buy or sell order, is called a market order. Another type of order is a limit order wherein you ask the broker to trade only if the price reaches a specific level. In a stop loss order,
you tell the broker to sell your shares if the price drops to a certain level to prevent significantloss because if it drops to that level it is likely to drop further and your losses are likely to
increase.
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What is meant by bullish and bearish trend?When the market goes up it is called a bullish trend and when the market goes down it is called a
bearish trend.
What is taking a position?
When you act upon a stock and buy into it, you are taking a position. A position is an amount of money committed to an investment in anticipation of favorable price movements. There are twokinds of positions : - a) Long positions are what most people do. When you buy long, that means
you are anticipating an upward movement in the price, and that is how you profit. People usually buy stocks at prices expecting to sell them later at higher prices and hence make profits. b) Short
positions are the tricky ones. When you buy short, you are anticipating a fall in the price and thefall is the source of your profits. The shares will be sold and when the price falls they will be
repurchased and given back and the difference is the where the investor profits. Of course, theinvestor who borrowed the shares carries the risk of not having the price move as anticipated, in
which case he may lose money in repurchasing the stocks.
What is a contract note?Contract Note is a confirmation of trades done on a particular day on behalf of the client. It
establishes a legally enforceable relationship between the client and standardchartered-wealthmanagers with respect to the settlement of the trades. The Contract Note would show
settlement number, order number, trade number, time of trade, quantity and price of the trades, brokerage charged, etc and it would be signed by an authorised person of standardchartered-
wealthmanagers. These are made in duplicate and the member and the client both keep a copyeach. A client should receive the contract note within 24 hours of the executed trade.
What are the additional charges other than brokerage that can be levied on
the investor? The trading member can charge: 1. Securities Transaction Tax. 2. Service tax asapplicable. 3. Transaction charges levied by exchange, Stamp duty and other charges directly
attributable to the transaction. Note : The brokerage and service tax is indicated separately in thecontract note.
What is a book-closure/record date?
Book closure and record date help a company determine exactly the shareholders of a companyas on a given date. Book closure refers to the closing of register of the names or investors in the
records of a company. Companies announce book closure dates from time to time. The benefitsof dividends, bonus issues, rights issue accruing to investors whose name appears on the
company's records as on a given date, is known as the record date.
What is the difference between book closure and record date?In case of a record date, the company does not close its register of security holders. Record date
is the cut off date for determining the number of registered members who are eligible for thecorporate benefits. In case of book closure, shares cannot be sold on an Exchange bearing a date
on the transfer deed earlier than the book closure. This does not hold good for the record date.
What is a no-delivery period?Whenever a company announces a book closure or record date, the Exchange sets up a no-
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delivery (ND) period for that security. During this period only trading is permitted in thesecurity. However, these trades are settled only after the no-delivery period is over. This is done
to ensure that investor's entitlement for the corporate benefit is clearly determined.
What is an ex-dividend date?
The date on or after which a security begins trading without the dividend (cash or stock) includedin the contract price.
What is an ex-date?The first day of the no-delivery period is the ex-date. If there are any corporate benefits such as
rights, bonus, dividend announced for which book closure/record date is fixed, the buyer of theshares on or after the ex-date will not be eligible for the benefits.
What is Earnings Per Share?
Earnings Per Share (EPS) is the net profit earned per share of the company. It can be obtained bydividing the Profit after Tax (PAT) by the outstanding equity shares of the company. EPS
indicates the profitability of the company in relation to its share capital.
What is a Bonus Issue?While investing in shares the motive is not only capital gains but also a proportionate share of
surplus generated from the operations once all other stakeholders have been paid. But thedistribution of this surplus to shareholders seldom happens. Instead, this is transferred to the
reserves and surplus account. If the reserves and surplus amount becomes large, the companymay transfer some amount from the reserves account to the share capital account by a mere book
entry. This is done by increasing the number of shares outstanding and every shareholder isgiven bonus shares in a ratio called the bonus ratio and such an issue is called bonus issue. If the
bonus ratio is 1:2, it means that for every two shares held, the shareholder is entitled to one extrashare. So if a shareholder holds two shares, post bonus he will hold three. However, one should
note that the price of the share may adjust downwards once it becomes ex-bonus.
What is a Split?A Split is book entry wherein the face value of the share is altered to create a greater number of
shares outstanding without calling for fresh capital or altering the share capital account. For example, if a company announces a two-way split, it means that a share of the face value of Rs
10 is split into two shares of face value of Rs 5 each and a person holding one share now holdstwo shares.
What is a Buy Back?
It is a process by which a company can buy back its shares from shareholders. A company may buy back its shares in various ways: from existing shareholders on a proportionate basis; through
a tender offer from open market; through a book-building process; from the Stock Exchange; or from odd lot holders. A company cannot buy back through negotiated deals on or off the Stock
Exchange, through spot transactions or through any private arrangement.
What is Book Value?Book Value is also called as Net Asset Value per share. It indicates the assets backing per share
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of the company. The ratio can be computed as follows: Book Value = (Paid-up Equity Capital +Reserves & Surplus - Fictitious Assets)/ Number of Equity Shares Outstanding Book Value can
be regarded as the liquidation value of the share. In case the company is liquidated immediately,the book value is the amount likely to be available per share (unless all the assets and liabilities
are not stated at their realizable value in the balance sheet),which is often the case.
What is a settlement cycle?Settlement cycle is the accounting period for the securities traded on the exchange.
Settlement Cycle on the BSE The settlement cycle on the BSE is Trade plus two days, or T+2, as per a Sebi directiveimplementing this new cycle from April 1, 2003. Under rolling settlement, trades done on one
day are settled after a certain number of days. So, T+2 will mean that the final settlement of transactions done on the Trade day, will be settled by exchange of money and securities on the
second business day (excluding Saturday, Sundays, Bank and Exchange Trading Holidays). Pay-in and Pay-out for 'A', 'B1', 'B2', µT¶, µS¶, µTS¶, 'C', "F", "G" & 'Z' group of securities Settlement
is done on a T+2 basis. The pay-in/pay-out process will be settled on the T+2 day.
Summary of the Settlement Cycle
Day Activity
T
Trading on BOLT and daily downloading of statements showing details of transactionsand margins at the end of each trading day.
Downloading of provisional securities and funds obligation statements by member-
brokers.
6A/7A* entry by the member-brokers/ confirmation by the custodians.
T+1Confirmation of 6A/7A data by the Custodians upto 11:00 a.m. Downloading of finalsecurities and funds obligation statements by members.
T+2
Pay-in of funds and securities by 11:00 a.m. and pay-out of funds and securities by
1:30 p.m. The member-brokers are required to submit the pay-in instructions for fundsand securities to banks and depositories respectively by 10: 30 a.m.
T+3 Auction on BOLT at 11.00 a.m.
T+4Auction pay-in and pay-out of funds and securities by 12:00 noon and 1:30 p.m.
respectively.
Source : www.bseindia.com
NSE Settlement Cycle
The NSE too follows a rolling settlement cycle of T+2.
The stock exchange sends to NSCCL the details of trades at the end of the trading day. The
clearing corporation determines the total obligations of each member and transfers the data to
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clearing members (CM). All the trades done during a particular trading session are clubbedtogether and settled. NSCCL then determines the net obligations of members in terms of
deliveries of securities and funds, and the settlement is completed when the funds and securitiesare paid out.
On the securities pay-in day, members bring in securities to NSCCL whereas on the pay out day,securities are delivered to members. If there is a shortfall in securities, then an auction isconducted to meet it.
This table makes the process clearer :
Activity Day
Trading Rolling Settlement Trading T
ClearingCustodial Confirmation
Delivery Generation
T+1 working days
T+1 working day
Settlement
Securities and Funds pay in
Securities and Funds pay outValuation Debit
T+2 working day
T+2 working dayT+2 working day
Post Settlement
AuctionBad Delivery Reporting
Auction settlementRectified bad delivery pay-in and pay-out
Re-bad delivery reporting and pickupClose out of re-bad delivery and funds pay-in &
pay-out
T+3 working dayT+4 working day
T+5 working dayT+6 working day
T+8 working dayT+9 working day
Source : www.nseindia.com
What is a rolling settlement?
Under rolling settlement all open positions at the end of the day mandatorily result in payment/
delivery µn¶ days later. Currently trades in rolling settlement are settled on T+2 basis where T is
the trade day. For example, a trade executed on Monday is mandatorily settled by Wednesday
(considering two working days from the trade day). The funds and securities pay-in and pay-out
are carried out on T+2 days.
When does one deliver the shares and pay the money to broker?
As a seller, in order to ensure smooth settlement you should deliver the shares to your broker
immediately after getting the contract note for sale but in any case before the pay-in day.
Similarly, as a buyer, one should pay immediately on the receipt of the contract note for purchase
but in any case before the pay-in day.
What is short selling?
Short selling is a legitimate trading strategy. It is a sale of a security that the seller does not own,
or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers
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take the risk that they will be able to buy the stock at a more favorable price than the price at
which they "sold short."
What is an auction?
An auction is conducted for those securities that members fail to deliver/short deliver during pay-
in. Three factors primarily give rise to an auction: short deliveries, un-rectified bad deliveries,
un-rectified company objections.
Is there a separate market for auctions?
The buy/sell auction for a capital market security is managed through the auction market. As
opposed to the normal market where trade matching is an on-going process, the trade matching
process for auction starts after the auction period is over.
What happens if the shares are not bought in the auction?
If the shares are not bought at the auction i.e. if the shares are not offered for sale, the Exchangesquares up the transaction as per SEBI guidelines. The transaction is squared up at the highest
price from the relevant trading period till the auction day or at 20 per cent above the last
available Closing price whichever is higher. The pay-in and pay-out of funds for auction square
up is held along with the pay-out for the relevant auction.
What is bad delivery?
SEBI has formulated uniform guidelines for good and bad delivery of documents. Bad delivery
may pertain to a transfer deed being torn, mutilated, overwritten, defaced, or if there are spelling
mistakes in the name of the company or the transfer. Bad delivery exists only when shares are
transferred physically. In "Demat" bad delivery does not exist.
What are company objections?
A list documenting reasons by a company for not transferring a share in the name of an investor
is called company objections. Rejection occurs due to a signature difference, or fake shares, or
forgery, or if there is a court injunction preventing the transfer of the shares.
What should one do with company objections?
The broker must immediately be notified. Company objection cases should be reported within 12
months from the date of issue of the memo for the original quantity of share under objection.
Who has to replace the shares in case of company objections?
The member who has sold the shares first on the Exchange is responsible for replacing the shares
within 21 days of the Exchange being informed. Company objection cases that are not rectified
or replaced are normally auctioned.
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After a sale, the share certificate along with a proper transfer deed duly stamped and complete in
all respects is sent to the company for transfer in the name of the buyer. Once the transfer is
registered in the share transfer register maintained by the company, the process of transfer is
complete.
What are the rights of the investor?
The right to get - Proof of price/brokerage charged, Money/shares on time, Statement of
Accounts and Contract Note from trading member.
What are the obligations of the investor?
The obligation to - Sign a proper Member-Constituent Agreement Possess a valid contract or
purchase/sale note Deliver securities & make payment on time Provide Margin before trade.
What are the tax implications of investing in Indian equities?Tax rates on investments gains are categorized as long term & short term capital gains. (a) Long
term capital gains Long Term investments that are held for more than 12 months are termed as
long term capital assets. Profit on sale of such assets is termed as long term capital gain (LTCG).
(b) Short term capital gains Shares that are held for less than 12 months are classified as short
term capital assets.
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Currency futures are standardized foreign exchange contracts traded on NSE to buy or sell onecurrency against another on a specified future date, at a price specified on the purchase or sale
date.
2. Basics of Currency futures
The forex market is where one currency is traded for another.The average daily turnover is inglobal forex and related markets is in trillions of US dollars.The spot exchange rate refers to the
current prevailing exchange rate at which a currency can be bought or sold for another. Forwardexchange rates are those quoted and traded for future delivery of underlying currencies and
payment.
The forward rates are different from spot rates depending on market sentiments and expectedfuture conditions. the pricing of a currency forward contract is determined by the prevailing spot
rate and interest rates differential of the respective countries for a specified date in future.
The forward contracts are customized bilateral agreements between two counterparties agreeingto buy or sell the underlying on a specified rate.
Currency futures are standardized foreign exchange contracts traded on NSE to buy or sell one
currency against another on a specified future date, at a price specified on the purchase or saledate.The exchanges clearing house acts as a central counterparty for all trades and thus,
undertakes the responsibility of performance guarantee.
Currency futures can be bought/sold on the NSE through members of the exchange, after opening a trading account and depositing requite margin amount with the trading member.
3. What is a Currency futures contract?
This is a standardized version of forward contract that is traded on a regulated exchange. It is an
agreement to buy or sell a specified quantity of an underlying currency on a specified date infuture at a specified rate
4. What are the currencies traded on NSECD?
Currenctly, USD-INR is allowed for trading.
5. What are the trading hours?/
Trading is allowed in currency futures from Monday to Friday between 9.00 a.m to 5.00 p.m
6. When will the Currency futures contract expire every month?
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The last trading day for a near month futures contract will be two working days prior to the lastworking day (excluding Saturdays) of the month. The settlement price will be RBI mandated
reference rate on the last trading day.
7. Participants of a Currency Futures Market
NSE provides a host of benefits to a wide range of financial market participants, includinghedgers, investors /traders and arbitrageurs.
Hedgers: NSE aims to provide a high liquidity platform for hedging against the effects of
unfavorable fluctuations in the foreign exchange markets.Banks, Importers, Exporters, andCorporates can hedge on NSE at low entry and exit.
Investors/Traders: Anybody interested in taking a view on appreciation/depreciation of exchange
rate in the long and short term can participate in the NSE currency futures.
Arbitrageurs: They get opportunity to trade in the fluctuations of currency in between exchanges.
8. What are the factors that affect the exchange rate of currency?
It is affected by the supply and demand for the country¶s currency in the international foreignexchange markets. Interest rates, Inflation, trade balance and economic & political scenarios in
the country also affect the exchange rate.
9. Why do we need Currency futures?
This is required if our business if its influenced by fluctuations in currency exchange rates.E.g if you are exporting something and the value of the INR has gone up, you earn less in terms of
Rupees that you had anticipated. Currency futures help you hedge against these exchange raterisks.
10. How will it help small retail traders?
The minimum size of the USD/INR futures contract is USD1000 or Rs 49000(approx in
INR).This is well within the reach of most small traders. All transactions on the exchange areanonymous and are executed on a price time priority ensuring that the best price is available to
all categories of participants.
11. What are the risks involved in Currency futures?
Risks in currency futures pertain to movements in the exchange rate. There is no a confirmedformula to determine whether the currency rate will fall or rise. A judgment on this is the domain
of experts with knowledge and understanding of variables that affect currency rates.
12. What are the contract specifications for Currency futures contracts?
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Initial Public Off ering (IPO) is when an unlisted company makes either a f resh issue of securities or an
off er f or sale of its existing securities or both f or the f irst time to the public. This paves way f or listing
and trading of the issuers securities.
What is a Rights Issue?
Rights Issue (RI) is when a listed company which proposes to issue f resh securities to its existing
shareholders as on a record date. The rights are normally off ered in a particular ratio to the number of
securities held prior to the issue. This route is best suited f or companies who would like to raise capital
without diluting stake of its existing shareholders unless they do not intend to subscribe to their
entitlements.
What is a Preferential Issue?
A pref erential issue is an issue of shares or of convertible securities by listed companies to a select group
of persons under Section 81 of the Companies Act, 1956 which is neither a rights issue nor a public issue.
This is a f aster way f or a company to raise equity capital. The issuer company has to comply with the
Companies Act and the requirements contained in Chapter pertaining to pref erential allotment in SEBI
(DIP) guidelines which inter-alia include pricing, disclosures in notice etc.
What is the difference between an offer document, Red a prospectus and adraft offer doc?
Off er document means Prospectus in case of a public issue or off er f or sale and Letter of Off er in case
of a rights issue, which is f iled Registrar of Companies (ROC) and Stock Exchanges. An off er documentcovers all the relevant inf ormation to help an investor to make his/her investment decision. Draf t Off er
document means the off er document in draf t stage. The draf t off er documents are f iled with SEBI,
atleast 21 days prior to the f iling of the Off er Document with ROC/ SEs. SEBI may specif ies changes, if
any, in the draf t Off er Document and the issuer or the Lead Merchant banker shall carry out such
changes in the draf t off er document bef ore f iling the Off er Document with ROC/ SEs. The Draf t Off er
document is available on the SEBI website f or public comments f or a period of 21 days f rom the f iling of
the Draf t Off er Document with SEBI.
What is a Red Herring Prospectus?
Red Herring Prospectus is a prospectus, which does not have details of either price or number of sharesbeing off ered, or the amount of issue. This means that in case price is not disclosed, the number of
shares and the upper and lower price bands are disclosed. On the other hand, an issuer can state the
issue size and the number of shares are determined later. An RHP f or and FPO can be f iled with the RoC
without the price band and the issuer, in such a case will notif y the f loor price or a price band by way of
an advertisement one day prior to the opening of the issue. In the case of book-built issues, it is a
process of price discovery and the price cannot be determined until the bidding process is completed.
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A f irm that invests the pooled f unds of retail investors in securities in line with the stated investment
objectives. For a f ee, the investment company provides more diversif ication, liquidity, and prof essional
management service than is normally available to individual investors.
What is a Mutual Fund?
Mutual Fund is a investment company that pools money f rom shareholders and invests in a variety of
securities, such as stocks, bonds and money market instruments. In Simple Words, Mutual f und is a
mechanism f or pooling the resources by issuing units to the investors and investing f unds in securities in
accordance with objectives as disclosed in off er document.
What is NAV?
The Term Net Asset Value (NAV) is used by AMCs to measure net assets. It is calculated by subtracting
liabilities f rom the value of a f und's securities and other items of value and dividing this by the number
of outstanding units. Net asset value is popularly used in newspaper mutual f und tables to designate the
price per unit f or the f und. Calculating NAVs - Calculating mutual f und net asset values is easy. Simply
take the current market value of the f und's net assets (securities held by the f und minus any liabilities)
and divide by the number of units outstanding. So if a f und had net assets of Rs.50 lakh and there are
one lakh units of the f und, then the price per share (or NAV) is Rs.50.00.
How often is the NAV declared?
The NAV of a scheme has to be declared at least once a week. However many Mutual Fund declare NAVf or their schemes on a daily basis. As per SEBI Regulations, the NAV of a scheme shall be calculated and
published at least in two daily newspapers at intervals not exceeding one week. However, NAV of a
close-ended scheme targeted to a specif ic segment or any monthly income scheme (which are not
mandatory required to be listed on a stock exchange) may be published at monthly or quarterly
intervals.
What are the benefits of investing in Mutual Funds?
The advantages of investing in a Mutual Fund are:
1. Prof essional Management: You avail of the services of experienced and skilled prof essionals who are
backed by a dedicated investment research team, which analyses the perf ormance and prospects of
companies and selects suitable investments to achieve the objectives of the scheme.
2. Diversif ication: Mutual Funds invest in a number of companies across a broad cross-section of
industries and sectors. This diversif ication reduces the risk because seldom do all stocks decline at the
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