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Mutual Funds

February 21, 08 by FinanceTurf

A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective.

The mutual fund will have a fund manager who is also known as the portfolio manager and is responsible for investing the pooled money into specific securities (usually stocks or bonds) and collects the dividend or interest income.

The investment proceeds are then passed along to the individual investors.

Mutual Fund Companies
Mutual Fund Companies

“A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.”

When we invest in a mutual fund, we are actually buying shares (or portions) of the mutual fund and become a shareholder of the fund.
Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (we don’t have to figure out which stocks or bonds to buy).

Common mutual fund companies are – Reliance Mutual Funds, LIC Mutual Fund, Fund Unit Trust of India, Tata Mutual Fund, SBI Mutual Funds and much more like these.

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National Stock Exchange of India (NSE)

February 18, 08 by FinanceTurf

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock exchange.

National Stock Exchange
National Stock Exchange

The main objective of NSE is to provide a nation wide transparent market for equity, debt and other variation of securities.

It’s the largest stock exchange in India.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries but its ownership and management operate as separate entities.

National Stock Exchange
National Stock Exchange

Vibrant features of NSE are:-

2) Securities traded – The NSE has two segments for trading in securities

a) Capital market segment – equity, debentures and hybrids,

b) Money market segment – T-bills, Cps, CDs, PSU bonds etc.

2) Payment and delivery on the NSE are completed within 15 days of the transactions.

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Money Market..

February 15, 08 by FinanceTurf

Money market is the market for short term funds meant for use for a period of up to 1 year.
Money market provides means for raising funds for meeting short term requirements so cash on one hand, and the deployment of surplus funds for short periods on the other.

The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time.

Money market trades in short term financial instruments commonly called "paper".

This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity. The money market is not a particular place in a geographical sense.

It is a term to describe all organizations and institutions which deal or facilitate dealings in short term debt instruments.
These instruments include the Reserve Bank, the State Bank of India, other commercial banks, cooperative banks, LIC, GIC, and UTI.

Money Market
Money Market

Common Money Market Instruments are:-

• Banker’s acceptance - A draft issued by a bank that will be accepted for payment, effectively the same as a cashier’s check.

• Certificate of deposit - A time deposit at a bank with a specific maturity date; large-denomination certificates of deposits can be sold before maturity.

• Repurchase agreements - Short-term loans-normally for less than two weeks and frequently for one day-arranged by selling securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.

• Commercial paper - An unsecured promissory notes with a fixed maturity of one to 270 days; usually sold at a discount from face value.

• Treasury bills - Short-term debt obligations of a national government that are issued to mature in 3 to 12 months.

• Money market mutual funds - Pooled short maturity, high quality investments which buy money market securities on behalf of retail or institutional investors.

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