The Mutual Fund offer document and the fact sheet carry certain information that can give a great deal of detail about the fund, its past performance in terms of returns. Most of the fact sheet or offer documents published by the Asset management companies are of similar standard and the data provided by the AMC in these fact sheets are of importance to the investors. The investor should know what to look at in these fact sheets and offer document. Since the fact sheet act as a guide, the investors should take its guidance to get more information on the schemes of mutual fund companies.
If the mutual fund investor is informed, the probability of him getting good returns is very high. So for the uninformed investors of mutual fund we had put certain points and notes that they should look at when they are going through a fact sheet.
Under the category of mutual funds the Equity fund fact sheet and debt fund fact sheet both need to be properly analyzed on the basis of certain points which are mentioned below.
POINTS TO LOOK AT IN EQUITY FUND FACTSHEET.
1. Investment objective: The mutual fund’s investment objective states what it aims to achieve i.e. capital appreciation, income generation among others. It could also inform the investor about the investment style of the fund and the kind of risk it is prepared to take for achieving its investment objective. Ideally, an investment objective should be pointed enough for the investor to understand whether his own investment objective fits well with that of the mutual fund. For instance, an investment objective that states that the fund will ‘attempt to generate capital appreciation by investing significantly in the mid cap segment’, it tells the investor that it is likely to be a high risk – high return investment. If the investor has the risk appetite for such an investment he can consider investing in the fund.
2. Allocation of stock: Allocation of stocks by the Asset management companies are shown in the factsheet, the composition of portfolio are shown properly so that all those investor who have invested in the mutual fund or those who wish to invest in the fund can get an proper view of the style of mutual fund management by the AMC’S. When we look at the stock allocation of the AMC’s we can judge the level of diversification by taking into consideration the top 10 stocks in their portfolio. We believe that if a fund has more than forty percent in the top 10 stocks than it is not properly diversified. In a volatile situation a mutual fund which is well diversified will be more effective then sectoral flavor funds. Many times it is noticed that the whole portfolio is well diversified but one single stock is holding such a high investment that the balance of diversification cannot be maintained. This can turn out to be risky proposition for a pure diversified equity funds.
3. Allocation of sectors: A well diversified equity fund need to be diversified not only on the basis of stocks but it need to be well diversified across sectors too. When we evaluate or analyze a mutual fund it is not enough to evaluate the stock allocation but also the sectoral allocation. If a mutual fund is not well diversified across sector it may get into trouble if there is a sudden crash in the market. While calculating the sectoral allocation, the investor must combine like-natured sectors to understand the level of sectoral diversification.
4. Allocation of asset: Asset allocation let you know how the funds assets are diversified across stocks, sectors, and current assets/cash. With the detail of stocks and sectors, this is another thing that need to be taken care of. A fund manager had to decide the allocation to cash. The allocation to cash is in itself an important decision. By looking at the factsheet we can note down the allocation to cash by the equity fund. If the fund manager is holding to cash for some time, this means that he is waiting for the right opportunity or it means that he is not getting enough stock-picking opportunity at this point of time. Allocation to cash can be beneficial if the market takes a down turn, as a good portion is in cash which is not affected by the crash, where as stock allocation will take a beating. But a good allocation to cash can go against the mutual fund at the time of market upswing.
5. Portfolio Turnover Ratio: A portfolio turnover ratio tells the investor how much churning the mutual fund has witnessed over the period of time. The basis of this calculation is the number of equity shares brought or sold by the equity fund over the review period. High turn over indicates high churning by the fund house. Churning of funds should be in line with the funds investment philosophy. High churning can be good or can be bad for the fund, as I said it depends on the investment philosophy. For example a growth fund will witness high turnover as the churning is high where as a value fund will have low turnover because the churning will be low as the fund manager invest for a long term.
The portfolio turnover ratio is not given much importance by the fund houses in their factsheets as it will open their stock picking decisions in front of the investors, who can further compare it and find out the weight age to their decisions.
6. Expense Ratio: The expense ratio shows us the expensive nature of the mutual fund. It shows us how expensive the mutual fund is for us. If an expense ratio is high it tells us that the mutual fund is expensive. In this expense ratio the fund management expenses form a large part. This fund management expense should decline with increase in net asset of the fund. The fund house as per regulation has to declare the expense ratio so that the investors can come to know the expensive nature of the fund.
7. Information on the Fund manager: Fund manager is the person who is managing the mutual funds. Some of the companies go for individual fund manager rather than a team of fund manager i.e. an investment team. But over a period of time it is better that an investment team managers manages your money rather than a individual star fund manager. Individual fund manager can quit the fund house any time thus affecting the stability of your fund. Therefore you need to check out the detail of the fund manager of the fund house or detail of their fund management team, so that you can verify and compare the fund houses on the basis of it. It is better to go for the fund house which has got stability in the fund management process
POINTS TO LOOK AT IN DEBT FUND FACTSHEET
8. Average maturity: In a debt fund factsheet this is on of the most important aspect to look into. In order to understand the fund manager’s view on debt market the investor has to go several months behind to see how the average maturity has moved. If the fund manager is maintaining a higher average maturity for quite sometime, it implies that the fund manager is expecting the interest rate to fall over the period of time. But if the average maturity is lower it means that the fund manager is expecting the interest rates to go up.
9. Credit Rating Profile: Credit rating of the securities in which debt fund invest varies. Therefore investors should check out the credit ratings of the securities of their debt funds. Most of the debt funds do not take much of credit risk. They invest in high rated securities. AAA/Sovereign paper which carry the lowest credit risk, attract the highest investments. Where as AA+/AA carry high credit risk.
10. Allocation to asset: Asset allocation in debt funds are again very important for the investors to look at. This will help him understand the risk a fund manager is taking and also the kind of approach the fund manager is taking towards the investment. The debt funds invest mainly in government securities and corporate bonds. Both of them carry varying risk.
Video about debt funding
Watch this video now: capitalmatchpoint.com , Hosted by Dave Dambro, The Capital matchpoint, 941-462-2728, www.capitalmatchpoint.com…I get this question a lot, which is right for our company, debt or equity? Well, there are two really distinct types of financing and you need to understand the benefits and the implications of each. Now, debt is an infusion of capital into your company. The expectation is that there will be a periodic re-payment, in the form of principal plus interest. The end result is the ROI for our investor, or the return on investment. A good example of debt funding would be loans or bonds. There are some pluses and minuses. The biggest one for debt is positive, you do not have to give up ownership. The down size is this, you must have sufficient and reliable cash flows and collateral to back it. So, it is really not a good option for most new companies. Let us take a look at equity. Equity is an infusion of capital in exchange for stock representing ownership in the company. Common examples would be: a common stock, a preferred stock, warrants, which are the right to buy the stock at a future date at a given price. The positives here are you have an infusion of cash and no debt service attached to it. The downside is this really is a high price, or high cost of financing. You may ask the question, well why is that? Well, it is like this. Equity investors take on a high degree of risk, and their expectations are for a higher ROI. If a capital seeker <b>…</b>
Question about debt funding
Why is congress attaching the new debt ceiling to the war funding bill?They are raising the debt ceiling to $14 trillion, an amount we can never repay. They just raised it to 12 trillion in February. They aren't allowing debate about it by attaching it to the war funding. What could be raising our debt 2 trillion in 6 months?
The democrats could have begun funding the wars but have decided to keep borrowing for it. They've had 3 years to do something about that. Its on their shoulders now, not Bush.
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Tags: asset Allocation, debt Fund Fact Sheet, Equity Fund Fact Sheet, equity funds, investors, Mutual Fund Companies, mutual Fund Documents, mutual Fund Fact Sheet, Mutual Fund Offer DocumentsCategory : marketting
the Dems are trying to back the Republicans into a corner- if the Republicans oppose the new debt ceiling and vote against the bill, the Dems can claim that the Repubs don't support the troops
Hamilton's idea was for rich people to loan the government money through bonds. In order for those bonds to retain any value (and the people holding them to be able to cash them in later), the government would have to survive. Therefore, those rich people would use their influence to make sure the government succeeded. Common people living hand-to-mouth didn't have extra money to loan out, or influence that would affect the fate of the new government, so they were pretty much left out of this process.
Send the collection agency a certified, return receipt letter requesting validation of the debt to include copies of contracts and other documentation that proves the debt is yours. Give them 30 days.
I'll assume you're talking about a small closely held corporation. If possible, keep the amount of debt less than twice the amount of equity (i.e a 2 to 1 leverage ratio). If it gets much higher than than, the owners may end up with some very high rates of return when the company is profitable due to the leveraging. But the leverage ratio is an indicator of a company's ability to withstand adversity. So if you're highly leveraged and the economy goes into recession, you won't be able to ride it out for very long.
If you're raising additional equity from the current group of owners, that's fine. If you're bringing in new additional owners as a source of equity, then you have to be concerned with how they will interact with the present owners. Also, the original owners' ownership percentates will be diminished with possible loss of control and/or board of directors seats.
am not sure in India, but in majority of the market there are mutual funds that invested in bond. the fund managers will switch from one bond to another for the most profitable return.
My suggestion is trying to obsord as much information as you can before making up your mind,here http://www.DebtFreetips.info/debt-free.htm is a good one.
If I got all of the information correct, it looks like they will be issuing $300 million in debt.
500 million shares x$3/shr = 1.5 Billion
500 million shares x $2/shr = $1 Billion
leaving $500 million for the capital budget.
Of course, this is overly simplfied, because there would be taxes already taken out of the dividend payment.
Sort of but not exactly. It is a collection of preferred stock, which are sort of a debt and in fact many times classified as debt but are further down on the food chain when it comes to bankruptcy proceedings than corporate bonds. Generally, preferred stock holder get nothing whereas corporate bond holders might bet a pertinence. Another difference is the tax consequences. A portion of the income from this fund will be taxed at the current preferred rate whereas bond interest is not.
Your question is unclear. Click on "Additional details" on the top right of ur screen and make the question clear and then i might be able to answer it