Page 248 - DCOM507_STOCK_MARKET_OPERATIONS

Unit 12: Mutual Fund

(ii) Duration: 7 years Notes
(iii) Investment Pattern: Almost all in equity shares
(iv) Investment Risk: Risky investment Capital, value can go up or down.
(v) Returns: No assured return. Annual distribution of minimum 80% of the Trust’s net income
from dividends, interest, etc. Good capital appreciation expected at the end of the scheme.
(vi) Liquidity: No repurchase facility except at the end of the scheme.
Listing on stock exchanges

Transfer of Units allowed
Bank loan up to 75% of the face value of units allowed
Main Advantages
(a) Good annual returns (though not assured) with good capital appreciation at the end of the
scheme
(b) Tax saving on capital gains
Some examples of all equity funds:

Scheme Issued by
(i) Canstock, Can double Canbank Mutual Fund
(ii) PNB Premium Plus- 91 PNB Mutual Fund
Balanced Funds

1. Objective: Income and growth with reasonable safety.
2. Duration: seven years.
3. Investment Pattern: About 50% in equity and the rest in debentures etc.
4. Returns: No assured return, but steady income due to annual distribution of minimum of
80% of the Trust’s income by way of dividends, interest etc.
Reasonably high capital appreciation also expected.
5. Liquidity: Repurchase facility after initial lock-in period of three years.

No listing on stock exchanges.
Transfer of units permitted.
Units can be pledged to banks for loans.
Main Advantages

(a) Reasonable return with possibility of reasonable capital appreciation
(b) Tax exemptions on income as well as capital gains
Some examples of balanced funds:
Scheme Issued by

MRIS’ 87,89,90 SBI Mutual Fund
Cancigo, Cangi Canbank Mutual Fund

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