Black Book
Black Book
Black Book
Mutual fund is an investment company that pools money from shareholders and invests
in a variety of securities, such as stocks, bonds and money market instruments. Most
open-end Mutual funds stand ready to buy back (redeem) its shares at their current net
asset value, which depends on the total market value of the fund's investment portfolio
at the time of redemption. Most open-end Mutual funds continuously offer new shares to
investors. Also known as an open-end investment company, to differentiate it from a
closed-end investment company. Mutual funds invest pooled cash of many investors to
meet the fund's stated investment objective. Mutual funds stand ready to sell and
redeem their shares at any time at the fund's current net asset value: total fund assets
divided by shares outstanding.
In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units
to the investors and investing funds in securities in accordance with objectives as
disclosed in offer document.
The growth and maturation of mutual fund industry is the greatest investment story
of the twentieth century. With the introduction of innovative products, the world of
mutual funds nowadays has a lot to offer to its investors. With the introduction of
diverse options, investors need to choose a mutual fund that meets his risk
acceptance, his risk capacity levels and has similar investment objectives as the
investor. There are a large number of schemes available in the market to cater to
the different needs of the investor. As on 29th Feb, 2008, there were 5343 mutual
fund schemes in the market.
The market has been bullish in past few months & has given huge returns. Even the
retail investors started investing in a big way expecting the rally to continue. But
with change in the global scenario, there has been a sudden & unexpected downfall
in the market which sunk the investors’ expectations, creating a negative sentiment
in the market. This has also affected the mutual fund investments.
Since Indian economy is no more a closed market, and has started integrating with
the world markets, external factors which are complex in nature are also affecting
us. Factors such as Sub-prime problem, expected US recession, an increase in
short-term US interest rates, the hike in crude prices and many other factors
have made Indian market volatile. The market has shown a downfall of --% in past
3 months. There has been sharp fall in the sales of mutual funds in past 2 months,
since January. The average asset under management (AUM) of the mutual fund
industry has declined sharply by 6.62% in March 2008, according to data released
by Association of Mutual Funds in India (AMFI). This shows that there has been a
change in the investors’ sentiments & expectations.
The Indian mutual fund industry is dominated by the Unit Trust of India which has
a total corpus of Rs700bn collected from more than 20 million investors. The UTI
has many funds/schemes in all categories i.e. equity, balanced, income etc with
some being open-ended and some being closed-ended. The Unit Scheme 1964
commonly referred to as US 64, which is a balanced fund, is the biggest scheme
with a corpus of about Rs200bn. UTI was floated by financial institutions and is
governed by a special act of Parliament. Most of its investors believe that the UTI
is government owned and controlled, which, while legally incorrect, is true for all
practical purposes.
The second largest category of mutual funds is the ones floated by nationalized
banks. Canbank Asset Management floated by Canara Bank and SBI Funds
Management floated by the State Bank of India are the largest of these. GIC AMC
floated by General Insurance Corporation and Jeevan Bima Sahayog AMC floated
by the LIC are some of the other prominent ones. The aggregate corpus of funds
managed by this category of AMCs is about Rs150bn.
The third largest categories of mutual funds are the ones floated by the private
sector and by foreign asset management companies. The largest of these are
Prudential ICICI AMC and Birla Sun Life AMC. The aggregate corpus of assets
managed by this category of AMCs is in excess of Rs250bn
The growth and development of Indian Mutual Fund Industry can be broadly
divided into four phases:-
First Phase (1964-87):
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was
set up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked
from the RBI and the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first scheme launched by
UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets
under management.
The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with
total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs. 44,541 crores of
assets under management was way ahead of other mutual funds.
COMPANY’S HISTORY
The Standard Chartered Group was formed in 1969 through a merger of two banks:
The Standard Bank of British South Africa founded in 1863 and the Chartered
Bank of India, Australia and China, founded in 1853.
From the early 1990s, Standard Chartered has focused on developing its strong
franchises in Asia, the Middle East and Africa using its operations in the United
Kingdom and North America to provide customers with a bridge between these
markets. Secondly, it would focus on consumer, corporate and institutional banking
and on the provision of treasury services - areas in which the Group had particular
strength and expertise.
Through global network of over 1,700 branches and outlets, SCB offer personal
financial solutions to meet the needs of more than 14 million customers across
Asia, Africa and the Middle East.
The various services offered by SCB include:
1) Personal Banking
2) SME Banking
3) Wholesale Banking
4) Islamic Banking
5) Private Banking
Mutual funds
Capital protected products
Derivative Arbitrage Products
Equity Advisory Services
Fixed income products
Mutual funds have huge potential. Standard Chartered bank deals in more than
2000 mutual funds. They offer a huge range of funds for varied customers. Initially
they make investors fill the customers so that they can understand the requirements
of the customers and thus provide services accordingly. This project basically
covers the mutual funds investors’ sentiments, to understand them and make
recommendations to SCB.