Bulid a laptop Essay Example | Topics and Well Written Essays - 500 words

Bulid a laptop - Essay Example Therefore, I spent time and analyzed the specifications of different laptops before purchasing the laptop. There are different factors that are to be analyzed in a laptop such as the Processor, RAM, Hard Drive, Display screen, operating system, weight and several other factors. It is also crucial to analyze the factors that are required the most to the user and then make the purchasing decision. I did the same as I analyzed what are the main features that I would need in a laptop and then I took the decision. Moreover, the price paid for the laptop is another decisive factor and thus I compared the benefits that I would get from the laptop and then compared it with the cost of the laptop and then tried to make a rational decision to ensure that the benefit to cost ratio is maximized. One of the main factors that I analyzed in the laptop was the processor. I purchased Dell Inspiron 15 3537 W8/I5/Gb6. One of the main reasons was the processor speed. I wanted a quick speed processor and therefore I purchased the core i5 processor. The other decisive factor that assists in the speed of the laptop is the RAM. I analyzed different laptops and this laptop had a RAM of 6GB (Dell) which I felt is sufficient for me. Also, the hard disk space of 750 GB (Dell) is sufficient for me. Operating system offered with this laptop is Windows 8, and I wanted to try new windows. And I am excited to use the new windows interface. Moreover, I like laptops with large screen and light weight. But I did not want a screen that is as large as 17 inch. Therefore, I honestly like the display screen of this laptop. The screen size is 15.6 inch (Dell) and therefore it is a very good size for me. As I used to carry my laptop while I travel, therefore the weight of the laptop is another crucial factor that could influence my decision. The weight of the laptop is very light and it is around 2.25 kg (Dell), and thus it is easy for me to pick

Constitutional and adminstrative law - (Conventions) Essay

Constitutional and adminstrative law - (Conventions) - Essay Example (Carroll, 2007) In UK royal prerogative has been used by the Monarch himself since centuries however, the trends changed and during 19th century, it was decided to get the advice of the Prime Minister or the cabinet in order to exercise this right. However, this has changed gradually and it is now even argued that royal prerogative has no place in the modern Western democracy. The fact that Tony Blair and Coalition government went to war by directly consenting the parliament itself may be considered as a trend shift suggesting that there now exists a convention to seek parliament’s consent for any action. This paper will therefore discuss as to whether there is a convention now which outlines that every government in country would take consent of the parliament for any actions taken. This paper will therefore argue whether a convention exists to restrict royal prerogative to go to war. There is no fixed definition of convention as it has been defined differently by various authors. Hood Philips defines conventions as â€Å"Ê ºRules of political practice, which are regarded as binding, by those to whom they apply, but which are not laws because they are not enforced by the courts and parliament†. (Philips, 2001). This definition may be considered as one of the earliest attempts to define what conventions are and under what conditions and authority they can be enforced. Philips outlines conventions as rules of political practice which are also not laws and therefore not enforced by the courts as well as the parliament. The above definition of convention therefore outlines that are understandings which regulate the conduct of the Crown and Parliament in the absence of any formal rules. Constitutional conventions therefore are considered as the tools through which flexibility can be achieved in constitution without actually going through a process of legislation. As such the ultimate purpose for which

Popular Music in the Making of Modern Brazil Essay Example for Free

Popular Music in the Making of Modern Brazil Essay Bryan McCann’s book â€Å"Hello, Hello Brazil† colorfully discussed the fascinating world on the development of the Brazilian music industry, the customs and the traditions of the population and the political standing that has influenced the Brazilian culture as a whole. The rapid acceptance of the cultural and political changes that has taken Brazil by storm has turned this nation to become one of the admired Latin American countries with the advancement of their musical industry. From the 1930s to the 1940s, the Brazilians have embarked on a cultural marketplace of recording and broadcasting that was influenced by Getulio Vargas, the politician from Rio Grande do Sul who was known for his dramatic and uneventful style of political agenda. In 1926, Getulio Vargas, a young congressman proposes that movie theaters and radio stations must grant royalties to the musicians for the recorded music they played. The â€Å"Getulio Vargas Law† suddenly became the congressman’s powerful means of endearing himself with the people of the music industry. The Brazilians love music and anyone in his power who protect and pursue the industry will be adored by the people. From then on, the music became livelier and the radio turned to be the most important tool for commercial broadcasting. Suddenly the seemingly boring stage of Brazil’s entertainment industry is teeming with composers, producers, music lovers and even politicians who ride up the wave for political purposes. But since there was a disparity between Minas and Sao Paolo, the two opposing regions with different roots and culture, music was used to unify differences over racial and regional gap. But as McCann discovers the living culture and the progress of Brazil into becoming a developing nation he also took a keen observation on the form of government ran by Getulio Vargas. From 1930 to 1954, the presidency has been advocated on and off by Getulio Vargas for which as some historians say has created a chain of uneventful events not only in Brazil but to the international scene as well. McCann relevantly categorized Getulio Vargas as the president with an unfamiliar way of rules not only in the world of politics but his way of influencing people as well. Vargas was loved by his nation not only because he has made Brazil the musical symbol of Latin America but he also imbibed a great authority on the country’s political and economic standard. He adopted and introduced different social, cultural and technological alternatives that were categorically from Western influence but this method, however, became unpopular especially to the socialist groups. Vargas became known for his goal in unifying Brazil to heal the long-standing class and regional differences between Sao Paolo and Minas. He tried to reconstruct Brazil’s political theme by removing regionalism and inject nationalism but his objectives have became so large that he ruled out the differences of ethnicity and class and at the same time introduced American influence into the culture starting with the music. However as the music progresses, Brazilian musicians and fans started to justify their musical preference with political color. This innovation has affected the purity of music into the realm of opinionated culture and nevertheless turned the foundation of music again into a tool of political segregation. And so the Brazilian and American influenced music industry although has founded solid grounds during the 1930s to 1940s has suddenly became fragmented in the 1950s (Bryann McCann). Getulio Vargas was born at Rio Grande do Sul in 1883. His family belongs to a wealthy clan who are politically strong which gave him the interest and advantage to assume a political career in his younger years. He became a congressman in 1926 through the Legislature in Rio de Janeiro and then appointed by President Washington Pereira as the Finance Minister of Brazil. Vargas has served his appointment well but in 1928 he decided to run for governorship against the political party of Pereira and incidentally won. After two years of being a governor, Vargas was selected by the party Alianca Liberal (Liberal Alliance) to run for president. But Pereira who is still the current president does not want to release his position to another party represented by a politician from the state of Minas. The â€Å"Golden Rule of Brazilian Politics† during that period is that it is required that there will be alternating president from among the state of Sao Paulo and the state of Minas. Since Pereira is from Sao Paulo, he quickly appointed Julio Prestes to be the upcoming president and asked the support of the people from Sao Paulo. This instigates a rebellion starting from the Southern Brazil but incidentally Prestes still won the presidency. Vargas publicly stated that he accepted his fate but then he clandestinely plotted to topple the administration of Prestes. A coup ensued and in three weeks, Getulio Vargas became by force the Provisional President of Brazil in 1930. Vargas’ ideals were of a capitalist and a corporatist and hates socialism. He focused on solidifying the powers of the federal government rather than providing strength and protection for the local and state government. Even in his first term in his office Vargas introduced a new constitution and people see it as a manipulation of the constitution to strengthen his hold. This is his means in achieving a long term project to turn Brazil into a strong nation with a strong economy much like the Western nation he is very fond of. When the people began to feel uncomfortable with his administration Vargas felt he has to do something to continue his ruling and prove himself again otherwise. When his original term was due to end in 1937, he staged another coup at the very last minute and declared that he is placing a new economic system the â€Å"Estado Novo† or the New State. The Estado Novo was a corporatist state based on the same principles used by Antonio Salazar of Portugal. This new state allowed for Vargas to become President again because basically Estado Novo is founded by the support from large labor sectors in the government. He again snatched another term that will serve him until 1943. However, as 1943 came around he stated that, due to the crisis situation brought about by the eruption of World War II, he would remain in office and that a new election would be held as soon as the war ended. He made a similar announcement in 1944 in the middle of the war. When the war ended, however, it seemed he had no option but to allow for elections to continue. Brazilian election laws of that time required any government official to resign one year prior to elections if they wished to be eligible for the following elections. But Vargas did not want to resign nor showed any intention of doing so. During this period the people of Brazil want him out of the palace and branded him as a dictator. The military became upset and tell him he needs to resign because he is not eligible to run. Vargas was outraged and said if they wanted him to be out of the presidential palace then they have to remove him physically but assured the military he would fight them with his own men. The military officials want no bloodshed and so their only option was to cut off of the electricity and the water supply to force him out. Although he challenged them to attack so that, as he said, his blood would symbolize his protest against the violence they are imposing on him the military did not hurt him. Finally he left the palace with a belief that he has served his country well. But Vargas has a heart of concrete determination and the appetite for power. In his years of being out of the palace he became a senator and a congressman thanks to his political party who is always in support for his candidacy. He became the Senator for the state of Rio Grande do Sul but although he is still active as a politician for four years he said he prefers being a private person. Then suddenly Vargas re-emerged as a member of the Brazilian Labor party which encouraged him to run for president again. In 1951, Vargas re-assumed his third term as the President of Brazil. However, the Brazilian economy was in shambles and there is an increasing opposition against his ruling. The country’s inflation cannot able to cope up with the cost of living which made Vargas powerless in the middle of this crisis. His health began to fade and attacks of depression and insomnia became frequent. The worst thing, however, was that the United States which he thought was his ally have became less concerned with Brazil and do not want to fulfill its promise of economic assistance. His ever increasing critics became more direct in hitting his administration until his chief bodyguard was implicated in an attempted killing of Vargas’s infamous critics. Corruptions of his government were exposed and the military leaders again called for his resignation but he did not resign. On the morning of August 24, 1954, a large crowd gathered in his palace shouting for his resignation. Then the military officials gave him an ultimatum of forcing him out. Pressured and officiated as the great dictator he went to his room, sat down and wrote a note to his people and then committed suicide. He wrote all his frustrations against those who criticize him the military and the opposition who continued to ask for his blood. He said they have insulted him and was not given the right to defend himself and has silenced his voice. He listed all the accomplishments he had done for Brazil such as liberating the people by means of social freedom, revised the wages in favor of the poor, guided the economy to prevent the effect of economic meltdown, and bring peace to warring factions by means of unification of the two states. He dramatically ended his note and added that now that he was condemned, he has to leave the people defenseless from an institution he has always protected but now exploited. When the note was read on the radio and aired on television, the audience suddenly felt his frustrations and despair. They began chanting his name and want him back. In the history of Brazil’s regime, Vargas became known by many to be the â€Å"Father of the Poor†. However, most people see him as an egomaniacal dictator. While he was seen as an idealist and a principled leader by captivating the hearts of the poor, his means in achieving a long lasting success for Brazil is nonetheless ostracized because of many shortcomings. First, he formed alliances with rich foreign countries in building a corporatist and a capitalist government so that he can control the economy and trash out socialism. In effect this did not materialize but socialism succeeded after he died. Second, those who oppose and criticize his dictatorial administration were imprisoned to contain them. Lastly his greed for power is endless and invalidated the laws by creating selfish deeds against the government just to hold on to power. Getulio Vargas ruled Brazil for almost 20 years. Unfortunately, most people claimed that his dictatorial leadership virtually destroyed Brazil’s constitutional government because of his greed for power and corruption. His means on making Brazil a great country was not successful for he has manipulated not only the constitution but fooled the people by denying them their own sovereign power to vote the person they want. Once in power he became an authoritarian and a corporatist which somehow destroyed the state controlled labor sectors. But as McCann said Vargas has at least earned a reputation of a good leader by those who he handed help. This is the part when he was successful with his leadership. In his long years of leadership, he once hailed a hero by the people of Brazil, Vargas became successful in some aspects for he has instituted social programs for the poor and created a bill that would allow women to vote. He gave freedom to women and encouraged them to become part of the labor forces of Brazil. He revitalized the military and for a time he enlivened the economy while improving the relationship of Brazil to other countries. Although many observers say Vargas was more prominent on the national than the local level, his relationship with the Western world signifies his intention in turning Brazil into an industrialized nation. Unfortunately his dreams did not completely materialize until he took his own life thinking he was a good president and had served his people well (Bryan McCann). Works Cited: McCann, Bryan. Hello, Hello Brazil: Popular Music in the Making of Modern Brazil Duke University Press, 2004. McCann, Bryann. Hello, Hello Brazil: Popular Music in the Making of Modern Brazil. Estudios Interdisciplinarios de AmA ©rica Latina y el Caribe (2004). August 4, 2009 http://www1. tau. ac. il/eial/index2. php? option=com_contentdo_pdf=1id=100.

Auckland DHB Elderly Care Strategies

Auckland DHB Elderly Care Strategies Auckland DHB is based to part of Auckland City in which they are serving seven wards Avondale/Roskill, Eastern Bays, Eden- Albert (Balmoral), Hobson, Tamaki- Maungakiekie(Penrose), Western Bays and Hauraki Gulf Islands .It has a population of 475,765 people. Eighty seven percent of the Auckland DHB population live within five wards within the Auckland DHB boundary.The other 13% live in either the Manukau ward within the Counties Manukau DHB area, or the Whau ward within Waitemata DHB.Auckland district health board got 10% of the people domiciled in the Auckland DHB district are aged 65 years and over, compared with 12% of NZ population.17% are aged under 15 years, compared with 22% for all of NZOlder People’s Health wards were the first patients moved into the new Auckland City Hospital which is started by Auckland district health board. Auckland district health board has two sites; inpatient services are based at Auckland City Hospital while outpatient and community services are based atGreenlane Clinical Centre. Older Peoples Health looks after the over 65-year-old population of Central Auckland and offers assessment, treatment and rehabilitation services. There are four wards at Auckland City Hospital that form part of the A+ Links Home and Older Peoples Health Service. The four wards are located in the the Support Building. Awatea Ward and Marino Ward are on level 14. Rangi toto Ward and Remuera Ward are on Level 13.These wards work very closely as a team and a unit. There is a strong Interdisciplinary team (IDT) focus on all four wards. This team is made up of nurses, doctors, physiotherapists, occupational therapists, social workers, dieticians, speech language therapists, pharmacists and others, who all make contributions to the patients care. STRATEGIES Auckland District Health Boards vision’s is of a healthy population, and quality health service to the community people need it –Healthy Communities, Quality Healthcare ~ Hei Oranga Tika mo te iti me te Rahi.It is strategic priorities of Auckland district health board that all rest homes and aged residential care facilities are certified and audited to ensure they provide safe, appropriate care for their residents. This is measured by seeing how they perform against the standards set out in theHealth and Disability Services (Safety) Act 2001. HEALTH OF OLDER PEOPLE STRATEGY {2001} It is cooperated on the national level where Auckland District health board is doing this by putting up policies in Auckland to improve and giving standard of life to old people by giving them appropriate services. Health and support services and programmes specially made to facilitate the wellbeing of the aged people, it also controls over the lives and their capability to participate and capability to social life, family, whanau and community life. OBJECTIVES It provides the planning to support the growth of quality health and support services integrated around the needs of older people. Funding will be managed and services delivered to increase timely access for the quality life integrated health and support services for older people, family, whanau and caregivers. The Hauora needs of Older Maori and their (whanau) family will be given by different appropriate programmes which are going to support them. Special requirement of services should be recognise to support unique position of Maori living in Aotera as Maori. The New Zealand Positive Ageing Strategy The 1999 International Year of Older Persons prompted the development of a New Zealand strategy promoting the value of older people.In the this strategy they state the aged people live positively and grow properly in there elderly age. Positively strategy is also takes account the health, financial security, independence, self- fulfilment, personal safety and living environment of older Auckland District citizens. The New Zealand Positive Ageing Strategy provides a framework for developing and understanding policy with implications for older people. POLICIES Auckland DHB A+ Links Older Peoples Health Older Peoples Health (OPH) Serviceprovides inpatient and outpatient care and is spread over two sites; inpatient services are based at Auckland City Hospital while outpatient and community services are based atGreenlane Clinical center. They also have the interdisciplinary day assessment includes Stroke Clinic, Parkinsons Clinic and Auckland City Memory Service. Also available is the Community Rehabilitation Programme to assist people who need some assistance to get back to how they were functioning prior to illness or who need help with the transition back to their home situation after a period in hospital. Home Health Service provides community based healthcare for adults 16 years and over living in Central Auckland. It is based atGreenlane Clinical Centre. Dementia Pathways We will increase access to early onset dementia services.We will help to develop a greater range and level of skill within the Aged Residential Care sector.Overall, we want to see safer practice in working with older people across both inpatient and community settings.This will also depend on increasing service accountability and the reporting of clinical issues. SENIORLINE Support of carer- In this old person can get a support of carer on full time basis from district health board. FUNDING Auckland DHB received $1074.6 million in funding in 2014/15 from Ministry of health Funding increases as a result of growth over the last 3 years were as follows: $21.9 million in 2014/15 $21.4 million in 2013/14 $32.2 million in 2012/13. They also get public funding to serve aged people of Auckland District from NGO’s. TERMINOLOGY Terminology is meant to be the word which is used in different settings of science and in forensic science to name some special characters of some incidents and reactions in chemical. The old age person in the old age socially they called geriatric or elderly. Old age person- As the age recognised socially for the human being which is 65 years and they called retired people. ATTITUDES it is define how the people look the old age person, some of them are think they rely on their kids on the governments to live their lives. The elderly people with dementia they are isolated from the community in the mental institutions. Elderly people are undervalued by the young generation and discriminated against especially with loss of health and income. STEREOTYPES People start commenting them by words like useless or the words which hurts their dignity and respect. Person with cognitive impairments are socially isolated from community and from the family sometime. Most of dementia clients those with serious illness are unable to make decisions for their own lives where some of the families feel burden on them start suggesting them to go live separate or in rest home facilities. BARRIERS It is problem where elderly people get abused at home where they have to do home cleanings and home works like lawn moving, vacuuming. They also neglected most of the times due to their unwillingness and the diseases for the social parties in the families. Society starts undervaluing them when they starts going towards their retirement and they hurts their dignity where they feel disrespectful for themselves. They create image of elderly person of negative energy due to their suggestive nature to young people from their experience which always suggest them to do right things or in proper manners, these things also varies from culture or to religion. 2.3 SERVICE PROVISION All the service provided to aged people through hospitals their primary services and the services which they get from community. General practitioner- for the routines check up Hospitals- for the emergencies and accidents Work and income- for their financial part of their life Citizen’s bureau- for first time information NZ Positive Ageing Strategy (2001) Health Of People Strategy (2002) Above strategies helps to improve their quality of life improving their policies from their past years data gathering from their regional statics. ACESS FRAMEWORK RESTHOME FACILITY- it is started from GP first he assess the elderly person how much care they need for themselves, if it is fell dependence then they ask them to go for NASC assessment to get full service. Ministry of health – incorporate the strategies Auckland District Health Boards- Corporate the policies and strategies stated by Ministry of Health for Auckland District. They can access WINZ for their financials though their website. www.wins.govt.nz REFERENCES A Links Needs Assessment and Service Co-ordination (NASC) †¢ Healthpoint. (n.d.). Retrieved February 21, 2015, from http://www.healthpoint.co.nz/public/older-peoples-health/a-links-needs-assessment-and-service-co-ordination/ Seniorline Home. (n.d.). Retrieved February 21, 2015, from http://www.adhb.govt.nz/SeniorLine Auckland DHB. (n.d.). Retrieved February 21, 2015, from http://www.health.govt.nz/new-zealand-health-system/my-dhb/auckland-dhb Residential care. (n.d.). Retrieved February 22, 2015, from http://www.health.govt.nz/new-zealand-health-system/publicly-funded-health-and-disability-services/residential-care HEALTH OF OLDER PEOPLE STRATEGY {2001}. Retrieved February 23, 2015, from http://www.health.govt.nz/system/files/documents/publications/olderplebb.pdf The positive ageing Startegy Retrieved February 22, 2015, from https://www.msd.govt.nz/what-we-can-do/seniorcitizens/positive-ageing/strategy/

Role of Symbols and Symbolism in C. S. Lewis Chronicles of Narnia :: Chronicles of Narnia Essays

Role of Symbolism in C. S. Lewis' Chronicles of Narnia It has always been amazing to realize how well the literature I read as a child has stayed with me through the years. It takes an exceptional writer to compose a narrative that maintains a storyline on the same level of a child's understanding; it takes everything short of a miracle to keep a child's interest. However, that undertaking has been accomplished by many skilled authors, and continues to be an area of growth in the literary world. Only this year the New York Times has given the genre of children's literature the credit it deserves by creating a separate best-sellers list just for outstanding children's books. Yet, on another level, children's literature is not only for the young. I believe that the mark of a brilliant children's author is the age range of those who get pleasure from the stories; the wider the range, the better. I believe a retention of knowledge, as well as the love for a book (whether as an adult or child) is partly linked to the quality of words and imagination utilized in the author's tales. C. S. Lewis is a wonderful example of an author whose work extends to reach beyond the level of children, and brings into view the scenery of Narnia as an expression of life. His storytelling style brought the lands and people of the chronicles intothe view of my mind's eye as a child, and in the same way let my imagination interact with the story. Now I am an adult, and I have come to realize that the symbolism and parallels in the Chronicles of Narnia, which I may have overlooked with my child's mind, are presently real to me. The Chronicles of Narnia are wonderful to read whether one be six or thirty-six; they relate to childhood as well as life in a general sense. While the Chronicles tell the story of an imaginary land full of talking animals and heroic princes/princesses, I tend to look further into it in order to grasp the symbolism and relation to life. Symbolism plays an important role in the chronicles by being the background and foundation of a character. I get the impression that in some ways the characters were constructed around their symbolic purpose, and not the opposite way.

i hate fish sticks :: essays research papers

i hate fish sticks cuz there not real fish they are some weird shit. Yo, what’s up little pup. : You schmendrick, it’s not that hard to replace a muffler. Ooo, there is a problem with your catalytic converter. Use that Alpo can and some hose clamps damn it. : No, you ass you’ll eviscerate your self, choke up on the knife, turn it around and hold the blade like†¦ give it to me, like this. : How about your mom, no, how about we build that model with those bottle rockets. : Why the hell can’t you read a fuckin map! It is there! Shut up crack head. Oh, your right it isn’t there. Crap. Let’s just take i295. : I hate it when people speed up and slow down & speed up and slow down! Why does on one know how to drive? : let’s race. Junior mints, when you leave them near your heater, they get nice and gooey, that way when you throw them out the sun roof at oncoming cars they splat like the nastiest bug you have ever seen, and for a bird effect use the fifty cent fruit pies at night. ; their gonna be confused when they open they’re mail box and find all that KFC, or when in Canada PFK. ; Dude, that guy was holding poop in one hand and his pooch in the other with a really content expression on his face!? : You can pick your friends and you can pick your nose but you cant pick your friends nose. : What’s the difference between a truck load of bowling balls and a truck load of dead babies? You can unload one with a pitchfork. : Oh my, look at that chick in the car in front of us, she is going nuts. Way too much crack aye kid. Dude, she made my day. ; old guy! :That’s an awfully large green lady with some pretty bright head lights. She kinda van shaped. Oops he was just a mail box. ; Yes I have n ot herd Duran Duran since the 80’s. This tares! You ate my cheetos didn’t you! You ate my cheetos didn’t you! toast your fingers they orange! You ate my cheetos didn’t you! They orange toast, they orange. Iiow punch yu in da moouf, yu gonna bleed on your sewf and ouders. I’m comin after you.

Study on Mutual Funds

OBJECTIVE OF THE STUDY The main objective of the present study to understand how mutual funds function in India. Specifically the study seeks to answer the following question: 1. What is the present status of mutual funds industry in India? How does it compare with mutual funds in foreign countries? 2. How mutual funds operate to create value for their investors? 3. What consideration an investors should keep in mind while making investment in mutual funds? 4. What is the regulatory frame work for mutual funds in India? 5. What are the problems faced by mutual funds industry in India & what are its future prospects? RESEARCH DESIGN & METHADOLOGY The Present study has been completed on the basis of secondary data colleted from internet and from various books, publicity materials and brochures issued by various mutual funds co. Reference has also been made to the regulations issued by securities and exchange board of India in regard to mutual funds. The data and the resource material so collected have been analysed within the frame work of 5 sections each focusing on a particular questions the study seeks to answer. PLAN OF THE STUDY The Study has been completed within the frame work of five sections. The Section wise plan is as follows:- I. PRESENT STATUS OF MUTUAL FUND INDUSTRY II. OPERATION OF MUTUAL FUNDS III. INVESTMENT CRITERIA IV. REGULATORY FRAME WORK OF MUTUAL FUNDS V. PROBLEMS AND PROSPECTUS I PRESENT STATUS OF MUTUAL FUNDS IN INDIAN CAPITAL MARKET Retail investors usually want to participate in the capital market, but due to paucity of funds, lack of expertise knowledge and limited risk-bearing capital, they have limited access to capital market. Mutual funds provide a mechanism that helps the retail investors enter the capital market. the mutual funds manage their funds for maximum gain with minimum risk and in the most professional way and work as agent for growth and stability of capital market. Till 1964, there were no mutual funds in India. In 1963, UTI Act, 1963 was enacted for the establishment of first mutual fund. The UTI launched its first scheme, US-64; in1964 which later became the most popular unit scheme in India. In1987, the RBI issued guidelines for bank-sponsored mutual funds. The evolution of mutual funds in India is consisting of different phases as follows: PHASE I: History of mutual funds started in India in 1964 when the first mutual fund in the name of Unit Trust of India was established in July 1964. UTI launched its first scheme US-64 which eventually became the most popular scheme and could accumulate the largest corpus. After 1964, it started several other schemes also. Till 1987, UTI remained the synonym for mutual fund in India. It was a sole player and gathered shape of monolithic mutual fund with millions of investors in several schemes. PHASE II: In 1987, the Government allowed the public sector banks to establish mutual funds. SBI Mutual Fund in 1987. Other mutual funds to follow suit were Canbank Mutual Fund (1987), PNB Mutual Fund (1989), IndBank Mutual Fund (1989), LIC Mutual Fund (1989), GIC Mutual Fund (1990), etc. The position continued till 1992 and other mutual funds were also established. PHASE III: There was a historical change in 1993 when the government allowed private sector mutual funds also. The first mutual fund in the private sector was Kothari Pioneer. Thereafter, in 1994, the foreign mutual funds were also allowed to operate schemes in India, and Morgan Stanley was the first foreign mutual fund in India whose initial issue of units was overwhelmingly subscribed by the investors. In 1992, SEBI was established and it issued guidelines for the working and supervision of mutual funds. PHASE IV: In 1966 a need was felt for the modification of SEBI (Mutual Funds) Regulations. On the basis of ‘Mutual Funds-2000’ Report, SEBI framed new Regulations in 1996. There have been several amalgamations of mutual funds. After 1996, a number of foreign mutual funds as well as Indian mutual funds have been established. At the end of march 2004, there were 33 mutual funds and Assets Under Management of Rs 1,39,616 crores. After 1996, mutual funds have become very popular among retail investors. The increase in number of mutual funds and their schemes speak of the underlying strength of the investors’ confidence in them. As in April, 2005, there were 28 mutual funds operating in India. Some of the mutual funds operating in India at present are as follows (in alphabetical order): ABN AmroDSP Merril LynchJM Sahara Bank of Beroda Escorts Kotak Mahindra SBI Benchmark Fidelity LIC Standard Chartered Birls Sunlife Franklin Tempelton Morgan Sundarum Canbank HDFC Principal Tata Cholamandalam HSBC Prudential Tauras Deutsche ING Vysya Reliance UTI A large number of mutual funds have intensified competition and led go to product innovation. Each of these mutual funds has a number of schemes operating with different features and characteristics. There are more than 500 schemes in operation at present. II OPERATION OF MUTUAL FUNDS A mutual fund is a financial intermediary which acts as an instrument of investment. It collects funds from different investors to a common pool of investible funds and then invests these funds in a wide variety of investment opportunities. Small investors who are unable to participate in capital market, can access the stock market through the medium of mutual funds which can manage their funds for maximizing return. The investment may be diversified to spread risk and to ensure a good return (dividend or capital gain or both) to the investors. The mutual funds employ professional experts and investment consultants to conduct investment analysis and then select the portfolio of securities where the funds are to be invested. Thus, a mutual fund is a pool of funds contributed by individual investors having common investment preferences. FEATURES AND CHRACTERISTICS OF MUTUAL FUNDS A mutual fund is a financial intermediary and works as an investment company. It has distinct features and characteristics which differentiate it from other financial intermediaries. Some of the features of mutual funds are: (i) Mutual fund is a pool of financial resources. Investors bring their individual funds together. Sometimes, the funds which otherwise may not come for investment in the capital market, are invested through mutual funds. (ii)Mutual funds are professionally managed. The resources collected by mutual funds are managed by professionals and experts in investment. These professionals can undertake specialized investment analysis such as fundamental analysis, technical analysis, etc. , which are not otherwise expected on the part of individual investors. (iii)Mutual fund is an indirect investing. The individual investors invest in the mutual funds which in turn invest in the shares, debentures and other securities in the capital market. The proportionate funds given by an investor are represented by the units of mutual fund. Investors own these units. The shares, debentures are owned by the mutual fund. Investors have no direct claim on these securities. In case of closure or liquidation of the proceeds of these securities are proportionally distributed among the unitholders. (iv)Investment in mutual fund in not borrowing-lending relationship. Investors do not lend money to the mutual fund. Consequently, the investors have to share the gains or losses of operations of the mutual fund. (v)Mutual fund is a representative of investors. The mutual funds collect the funds from investors under a particular investment scheme. as a representative, the mutual fund has to invest these funds as per the designated scheme only. MECHANISM OF MUTUAL FUND OPERATIONS A mutual fund represents pooled savings/funds of individual investors. Professional managers of the mutual fund invest these funds in different types of securities. They have to take different decisions from time to time. The revenue returns may be distributed by the mutual funds to the unitholders. Capital appreciation in the mutual funds also belong to the investors. MUTUAL FUND SCHEMES One of the main objectives of mutual funds is to provide better returns to investors at minimum risk. Mutual funds issue units to the investors in proportion to the funds contributed by the investors. The income of the funds are shared by the investors in the proportion to the number of units held. These mutual funds offer different types of schemes from time to time to attract investors and to take care of their needs, on the basis of nature of investment, type of operations and type of income distribution. Mutual funds may launch different schemes to offer one or more of the following: (a)Regular and steady flow of income, (b)High capital appreciation, c)Capital appreciation and regular return,and (d)Return with tax benefits. There are different ways in which various mutual fund schemes can be classified. Following shows the classification of mutual fund schemes with reference to schemes being offered in India: 1. On the basis of Life Span. (a) Close-ended Schemes (b) Open-ended Schemes 2. On the basis of Income Mode (a) Income schemes (b) Growth schemes 3. On the basis of Portfoli o (a) Equity schemes (b) Debt schemes (c) Balanced schemes 4. On the basis of Maturity of Securities (a)Capital Market Schemes (b)Money market Schemes 5. On the basis of Sectors Different Sectoral Schemes 6. On the basis of Load (a) Load Schemes (b)No Load Schemes 7. Special Schemes: (a) Index Schemes (b)Offshore Schemes (c) Gilt Securities Schemes (d) Exchange Traded Funds (ETF) (e) Fund of Funds. Some of these schemes have been explained below: OPEN-ENDED AND CLOSE-ENDED MUTUAL FUNDS SCHEMES As per SEBI Regulations, 1996, open-ended scheme means a scheme of mutual fund which offers units for sale without specifying any duration for redemption. On the other hand, close-ended scheme is one in which the period of redemption is specified. The open-ended mutual fund scheme sells and repurchases the units of mutual fund on a continuous basis. Any investor can become a member (by purchasing units) or can exit (by selling these units back to the mutual fund). These sales and repurchases of units take place at a price called Net Assets Value (NAV) which is calculated periodically on the basis of the market value of the portfolio of the mutual fund. The sale and repurchase prices are announced by the mutual fund on a periodic basis. The Unit Scheme-1964 (US-64) was an open-ended mutual fund scheme. The essential feature of open-ended scheme is the liquidity. On the other hand, close-ended mutual fund scheme is only one in which the limited number of units are sold to investors during a specified period only. Thereafter, any transaction in these units can take place only in secondary market, ie, the stock exchanges. So, after the initial public offering, the mutual fund goes out of the picture and subsequent sale and purchase take place among the investors. The market price of the units of a closed-ended mutual fund scheme is determined by the market forces of demand and supply. The liquidity to investors provided by the market. However, all the closed-ended mutual fund schemes are redeemable at the end of a specified period when all the investment of the scheme are sold and the proceeds are distributed among the unit holders on a proportionate basis. There are several close-ended schemes such as Master Share Scheme of the UTI. INCOME FUND AND GROWTH FUND The mutual funds are called income funds when they promise a regular and/or guaranteed return in the form of dividends to the investors. For example, UTI launched several Monthly Income Schemes. The portfolio of these schemes is usually consisting of fixed income investments such as bonds, debentures, etc. The income schemes are also known as dividend schemes. These schemes are ideal for investors who need or seek intermediate cash flows in the form of dividend payment. A growth fund scheme is one which offers capital appreciation as well as a variable dividend opportunity to the investors. The investors may get dividend income from the mutual fund on a regular basis and the capital appreciation is available in the form of increase in market price. Growth schemes are good and suitable for investors having long-term investment perspective. In addition, there may also be income-cum-growth (hybrid funds) where the investor may be offered fixed incomes as well as growth opportunities. An example of a growth fund is UTI Growth and Value Fund which is an open-ended equity oriented scheme. The objective is to seek capital appreciation by making investments primarily in listed securities of Indian companies. A variant of income fund is known as Dividend Yield Fund. These invest funds in shares of those companies that pay high dividends. In addition, any appreciation of share price adds or subtracts investors return. DOMESTIC FUNDS AND OFF-SHORE FUNDS The domestic funds schemes are those which are open for subscription by the investors of the country of origin only. Most of the mutual funds launched in India are domestic mutual funds. The off-shore mutual funds bring funds (in the form of foreign exchange) to the capital market. At present, several off-shore mutual fund schemes have been floated in India. Ind Bank Off-Shore Mutual Fund, 1993 and Common Wealth Equity Mutual Fund, 1993 are examples of off-shore mutual fund schemes. TAX-SAVING SCHEMES These mutual fund schemes are designed to avail tax exemptions and concessions to the investors. These schemes help individual investors in their tax planning. CANPEP MEP 1994, PNB-ELSS were some of the tax-savings schemes. These schemes are also known as Equity-linked savings schemes were entitled to tax benefit under Section 88 of the Income Tax Act. Recently, private sector mutual funds have also launched these schemes such as HDFC Tax Plan, KP Tax Shields, etc. MONEY MARKET MUTUAL FUNDS (MMMF) SEBI Regulations, 1996 define an MMMF, as one which has been set up with the objective of investing in money market investments which include commercial papers, commercial bills, ‘T-Bills, etc. The funds collected by these mutual funds are invested exclusively in money market instruments. Money market mutual funds are a part of short-term pooling arrangement of funds. These are open-end funds. These funds are very liquid and risk free because of nature of their investments. MMMF provide better returns than short-term bank deposits and are often considered to be good alternative to bank deposits. The Reserve Bank of India has announced Guidelines for money market mutual fund in April 1992. However, at present, the MMMF are also regulated under SEBI Regulations, 1996. SPECIALISED SECTOR FUNDS Sector funds schemes are those under which the funds are planned to be invested in a particular region, industry or sector. For example, Pharma (D) Scheme of Franklin Templeton Mutual Fund, Technology Company Scheme of DSP Merill Lynch Mutual Fund, Banking (D) of Reliance Mutual Fund are some specialised sector schemes of mutual funds. INDEX SCHEMES In this case, the funds collected by the mutual funds are invested in the shares forming the Stock Exchange Index. These funds are also known as growth funds. The funds are allocated o the basis of proportionate weight of different shares in the underlying Index. For example, Nifty Index Scheme of UTI Mutual Fund, Index Fund (Sensex) of Tata Mutual Fund, Index Fund (D) of Principal Mutual Fund are Index Schemes. There are 13 Index Funds which use S & P CNX NIFTY as the underlying index. EQUITY FUNDS SCHEMES Under these schemes, the funds are invested primarily in equity shares only. The equity fund schemes are high on the risk scale as the share prices are volatile. These funds try to reduce the risk by diversifying the investments in different types of shares. If invested rationally and properly, these schemes may give high returns commensurate with risk taken. The choice of investee companies is made by the mutual fund. These schemes may be income schemes or growth schemes. Fidelity Equity Fund is an open ended equity growth scheme with the objective of generating long term capital growth from a diversified portfolio of equity and equity-related securities (95%) and Money Market Instrument (5%). DEBT FUNDS SCHEMES In case of debt funds, the collected funds are invested in debt securities. A variant of debt funds schemes may be in the form of government securities funds scheme wherein the funds are invested in government securities only. Debt schemes are generally income scheme. A debt fund scheme is an ideal option for investors who are averse to risk which is associated wit equity schemes. BALANCED FUNDS A balanced fund provides both growth and regular incomes as these schemes invest both in debts and equity instruments in the proportion as disclosed in the offer document. These schemes are appropriate for investors who look for moderate growth. The NAV of these schemes are likely to be less volatile than the pure equity funds. GILT FUNDS The funds of these schemes are invested exclusively in government securities. These funds are low return and low risk and popular among the risk averse investors. Some of the gilt funds operating in India are Gilt Plus (Birla Sunlife Mutual Fund), Gilt Investment (Cholamandalum Mutual Fund), FT Gilt (Franklin Templeton Mutual Fund), Gilt long-term (HDFC Mutual Fund), Gilt Treasury (Prudential ICICI Mutual Fund), etc. SCHEMES BASED ON MARKET CAPITALIZATION In recent past, mutual funds in India have launched several schemes with a focus on market capitalization of companies. For example, UTI Large Cap Fund, UTI Small-Cap Fund, Chola Multi-Cap Fund, HDFC Premier Multi-Cap Fund, etc. are schemes based on market capitalization. It may be noted that the classification between large, small and mid-cap is arbitrary and can vary from market to market. In India, the National Stock Exchange defines mid-cap companies as those having average 6-months market capitalization between Rs. 75 crores to Rs. 750 crores. In Case of multi-cap or flexi-cap schemes, the investments ar e made across companies with different market capitalization-large, small or mid. LOAN AND NO-LOAN FUNDS A load fund is one that charges a % of NAV (Net Assets Value) as entry or exit fees. Whenever an investor buys or sells the units, a fee is charged by the fund to meet the administrative expenses. On the other hand, a no-loan fund is one which does not charge any fees for entry or exit. In case of no-loan fund, all transactions of sale and repurchase of units are done at NAV while in case of load funds, the repurchase is made at a price less than NAV and sale is made at a price more than NAV. FUND OF FUNDS A fund of funds scheme means a scheme that invests primarily in other schemes of same mutual fund or other mutual funds. Benchmark Mutual Fund has started a FOF under the name of FOF Junior BeES. EXCHANGE TRADED FUNDS Exchange Traded Funds (ETFs) refers to basket of securities that are tradeable at a stock exchange. They are somewhat similar to Index Fund Schemes. The ETFs are so called because they are listed on a stock exchange and are traded as any other listed security. So, ETFs have characteristics of open-ended mutual funds as well as that of listed shares. ETFs do not sell their units directly to the investors. Rather, a security firm creates an ETF by depositing a portfolio of shares in line with an Index selected. The security firm creates units against this portfolio of shares. These units are sold to the retail investors. So, the ETF has portfolio of shares as well as a liability towards the holders of ETF units. ETFs are different from Mutual Funds in the sense that ETF units are not sold to the public for cash. Instead, the Asset Management Company that sponsors the ETF (fund) takes the shares of companies comprising the index from various categories of investors like authorized participants, large investors and institutions. In turn, it issue them a large block of ETF units. Since dividend may have accumulated for the stocks at any point in time, a cash component to that extent is also taken from such investors. In other words, a large block of ETF units called a â€Å"Creation Unit† is exchanged for a â€Å"Portfolio Deposit† of stocks and â€Å"Cash Component†. The number of outstanding ETF units is not limited, as with traditional mutual funds. It may increase if investors deposit shares to create ETF units; or it may reduce on a day if some ETF holders remeed their ETF units for the underlying shares. These transactions are conducted by sending creation/ redemption instructions to the Fund. In case of mutual funds, the portfolio of the investments made under the scheme may change, but in case of ETF, this is not so, because the ETF portfolio created once does not change. The market value of the units of ETF changes in line with the Index automatically. The funds managers are not required to actively manage the portfolio resulting in lower expense level of the fund. Consequently, the NAV of the ETF would be higher than the NAV of the Index Fund with the same portfolio. As the ETFs are listed on a stock exchange, they provide a lot of liquidity and price is determined by the demand and supply forces and the market value of the shares held. As opposed to ETF, the sale/ purchase prices of the units of a mutual fund are based on the NAV. A comparison of ETF, Open-ended funds and close-ended funds has been presented in table below: 1. Parameter Open-ended Fund (OEF) Closed-ended Fund (CEF) Exchange Traded Fund (ETF) Find Size Flexible Fixed Flexible 2. NAV Daily Daily Real Time 3. Liquidity Provider Fund itself Stock Market Stock Market/Fund itself 4. Sale price At NAV plus load, if any Significant Premium/Discount to NAV Very close to actual NAV of Scheme 5. Availability Fund itself Through Exchange where listed Through Exchange where listed/ fund itself. 6. Portfolio Disclosure Monthly Monthly Daily/Real-time ETFs have edge over the ordinary mutual funds. In case of latter, an investor cannot take the benefit of intra-day movement of price of shares because the mutual fund units can be traded at the closing NAV based rate. However, the performance of ETF is based on the underlying index and ETF can be traded through out the day taking benefit of intra-day movement in price. In India, several ETFs, have been created so for. Bench Mark Mutual Fund has created 5 ETFs. 1. Liquid BeES 2. Nifty BeES 3. Nifty Junior BeES 4. Bank BeES, and 5. FOF Junior BeES All these 5 ETFs are listed and traded at the capital market segment of the NSE. Prudential ICICI Mutual Fund has launched SPICE which tracks the Sensex. It combines features of both open-ended scheme and exchange traded share. It is listed at Mumbai Stock Exchange and can be traded in a lot of one unit. Value of one SPICE is 1/100 of the Sensex value. UTI Mutual Funds has launched SUNDERS, which is also listed at Mumbai Stock Exchange. Certain ETFs traded at American Stock Exchange are QUBES (Representing NASDAQ-100), SPIDERS (representing S&P 500), DIAMONDS (Representing Dow Jones Industrial Average), etc. NET ASSETS VALUE (NAV) OF A MUTUAL FUND Investors are the owners of the mutual fund. Funds collected under a particular scheme are invested in different securities. So the ownership interest of the unit holders is represented by these securities. Net Assets Value (NAV) refers to the ownership interest per unit of the mutual fund, i. . , NAV refers to the amount which a unit holder would receive per unit if the scheme is closed. NAV is represented as follows: An amount of Rs. 50,00,000 has been collected by a mutual fund by the issue of 5,00,000 units of Rs. 10 each. The amount has been invested in different securities. The market value of these securities at present is Rs. 56,00,000 and the mutual fund has a liability of Rs. 4, 50,000 in respect of expenses, etc. The NAV of the fund is: The units of an open-ended mutual fund scheme are sold and purchased by the mutual fund at a price based on NAV. The NAV of a mutual fund scheme is calculated by dividing the net assets of the scheme by the number of outstanding units under that scheme on the date of valuation. SEBI Regulations, 1996 provide that while determining the price of the units, the mutual fund has to ensure that the repurchase price is not lower than 93% of the NAV and the selling price is not higher than 107% of the NAV. Further that the difference between the selling price and the repurchase price shall not exceed 7%, calculated on the selling price of the units. The NAV varies from time to time and is published in newspapers so as to enable the nvestors to know the value of their investments. SEBI Regulations, 1996 require that the NAV of a mutual fund scheme shall be calculated and published at least in two daily newspapers at an interval of not exceeding one week. III INVESTMENT CRITERIA MAKING THE INVESTMENT DECISION Ones main considerations as an investor, besides choosing which vehicles are right, lie in the a reas of risk management, taxes and inflation, and asset allocation. In order to reach your financial objectives, you must choose from diverse investment alternative – all of which vary greatly in the degree and type of risk and potential return. The key to developing a sound portfolio is to strike the right balance between potential reward and risk, based on your financial objectives, financial situation and investment style. We’ve all heard the expression, â€Å"Nothing ventured, nothing gained. † Perhaps nowhere does this maxim hold truer than in the financial markets, where pursuing potentially higher returns means accepting higher levels of risk. Before you venture anything, you should determine your personal level of risk tolerance, given your needs and goals. To do this, you should familiarize yourself with the various kinds of risk and how they affect different types of investments. THE MANY OF FACES OF RISK Risk is the possibility that one may lose some or all of his investment in real terms, or that his investment may not increase in value. Several factors may influence the amount of risk one can comfortably accept, including ones age, family situation, income, time horizon and financial goals. When investing, one faces the following key risks: †¢Market Risk: This is the possibility that an investment (e. g. , a stock) will decline in value. As a result, if you sold the investment, you would receive less than what you initially paid for it. †¢Credit Risk: This is the possibility that the issuer of an investment (e. g. , a corporate bond) may not live up to its financial obligations. A default by the issuer could mean that you lose your invested capital and the expected interest payments. †¢Inflation Risk: This is the possibility that the value of a long-term asset (e. g. , a government bond) may not grow enough to keep up with inflation, reducing your purchasing power as a result. †¢Reinvestment Risk: This is the possibility that interest rates will fall as an investment (e. . , a bond) matures. If this occurs, you may be unable to reinvest matured assets at the rate of return you were accustomed to receiving. This type of risk also applies to reinvesting the coupon payments received from bonds and other fixed-income payments. †¢Liquidity Risk: This is the possibility that you will be unable to liquid ate an asset (e. g. , real estate) when you want and at the price you want. As a result, you may be forced to retain the asset or accept less than you wanted for the sake of liquidity. †¢National, International, and Political Risk: The possibility that a country’s government will suddenly change its policies. Events such as wars, embargos, coups, and the appointments of individuals with unfavorable economic policies can impact the financial markets, especially concerning investments related to that country. Possible results changes in tax structures and changes in bond or stock ratings. †¢Economic Risk: The risk that the economy will suffer a downturn as a whole. Such an event generally affects all the financial markets across the board, from product prices to the job market. †¢Industry Risk: The risk that a specific industry will suffer a downturn. Often, industries related to the one that experiences problems will suffer as well. Tax Risk: The risk that high taxes will make investments less profitable for both businesses and investors. Businesses that have no pay expand or improve. Investments that carry heavy tax baggage generally lead to lower dividends for an investor. How Much Risk Is Right? The amount of risk that is right depends upon person to person. To determine the r isk comfort level, one may ask this himself: Am I willing to tolerate greater volatility for potentially higher returns from my investments, or do I place more emphasis on quality, with less risk? Several factors may influence the amount of risk one can comfortably accept in ones portfolio, including: †¢Age †¢Family situation †¢Income †¢Financial goals In addition, the markets evolve and ones personal goals will inevitably change with time. One of the best ways to keep ones investments on target is to meet with financial professional regularly. In these meetings, the investor and his financial professional can discuss the investment objectives, determine the individual risk tolerance level and help to understand the various risks associated with an investment. The financial professional can also help an investor build a portfolio that has the potential to provide the highest returns consistent with the amount of risk one wish to assume. HOW TO CHOOSE WHICH RISKS TO TAKE? Whenever one considers a new investment, he may wish to ask his financial professional the following questions: †¢What types of risk are involved? Once the financial professional has explained the risks, one must ask how he or she can help to manage or minimize the different kinds or risk for the investment one is considering. Not all kinds of risk will apply to every investment. †¢What could happen to the principal in a â€Å"worst-case† scenario? The financial professional can explain how diversifying ones portfolio can help mitigate the effect of a downturn in any one market or industry. For example, assume you invested in the stock of a highly speculative biotechnology company. The stock’s trading price could fall substantially if the company’s only product fails to get FDA approval or is shown to be inferior to a competitor’s product. Spreading ones money across different asset classes – stocks, fixed – income investments, and cash equivalents – could help one manage the risk better than investing all his funds in this one stock. †¢How will adding this investment to the holdings help to manage the portfolio’s overall risk? Managing market risk through a balance of financial assets in ones portfolio is a significant component of long-ter m investment success. Ideally, ones portfolio should offer a measure of protection during inevitable market downturns and be positioned for opportunity when markets heat up. In addition to risk there are other factors also which need to be considered before investing, as stated below: INFLATION: Inflation taxes are two factors always on the minds of investors. Inflation is the persistent increase in the cost of goods and services, and the reason why the same loaf of bread that costs you $1. 00 today will probably cost you $1. 05 next year. For your purchasing power to grow in â€Å"real† terms, your returns must outpace the inflation rate. TAXES: Additionally, taxes must be a consideration. There are investments available that are both taxable and tax-free; others are tax-deferred or tax-deductible. The differences are significant, but not as dizzying as they seem. ASSET ALLOCATION: Asset allocation refers to the diversification of your portfolio across all the different classes of assets. The goal of effective asset allocation is to develop an appropriate mix of investments based on your specific investment objectives that maximizes performance potential with an acceptable level of investment risk. The goal is more consistent returns, lower volatility and a greater chance of achieving financial objectives. SELECTION OF A MUTUAL FUNDS There are thousands of funds to choose from, but there are some general guidelines that can help you choose a fund. †¢Define your investment time horizon and financial goals. Meeting a long-term goal (e. g. , starting a college fund for a newborn) will require different investments than in meeting a short-term goal (e. g. , accumulating money to purchase a car). †¢Understand your risk tolerance and the risk of different mutual funds. Risk tolerance is based on your comfort level in the fluctuation of price, which will affect your investment principal. Once this is determined, you can match fund types that have historically shown commensurate price movement. Keep in mind, however, that past performance is no guarantee of future results. †¢Combine your goals, time horizon and risk tolerance and find a fund category that matches these objectives. This will help in deciding what types of funds you may want to consider. You will find that there are still many funds to choose from within a specific category. Your prudential financial professional will be able to perform a comparative analysis of the individual funds to find the most appropriate choice. Check with your tax advisor prior to investing in a tax-exempt or tax-managed fund. Match the term of the investment to the time you expect to keep it invested. Money you may need right away (for example, if your car breaks down) should be in a money market account. Money you will not need until your retire in decades (or for a newborn’s college education) should be in longer- term investments, such as stock or bond funds. Putting money you will need soon in stocks risks having to sell them when the market is low and missing out on the rebound. Expenses matter over the long term, and of course, cheaper is usually better. You can find the expense ratio in the prospectus. Expense ratios are critical in index funds, which seek to match the market. Actively managed funds need to pay the manager, so they usually have a higher expense ratio. Sector funds often make the â€Å"best fund† lists you see every year. The problem is that it is usually a different sector each year. Also, some sectors are vulnerable to industry-wide events (airlines do come to mind). Avoid making these a large part of your portfolio. Closed-end funds often sell at a discount to the value of their holdings. You can sometimes get extra return by buying these in the market. Hedge fund managers love this trick. This also implies that buying them at the original issue is usually a bad idea, since the price will often drop immediately. Mutual funds often make taxable distributions near the end of the year. If you plan to invest money in the fund in a taxable account, check the fund company’s website to see when they plan to pay the dividend; you may prefer to wait until afterwards if it is coming up soon. Research. Read the prospectus, or as much of it as you can stand. It should tell you what these strangers can do with your money, among other vital topics. Check the return and risk of a fund against its peers with similar investment objectives, and against the index most closely associated with it. Be sure to pay attention to performance over both the long-term and the short-term. A fund that gained 53% over a 1-yr. period (which is impressive), but only 11% over a 5-yr. period should raise some suspicion, as that would imply that the returns on four out of those five years were actually very low (if not straight losses) as 11% compounded over 5 years is only 68%. Diversification can reduce risk. Most people should own some stocks, some bonds, and some cash. Some of the stocks, at least, should be foreign. You might not get as much diversification as you think if all your funds are with the same management company, since there is often a common source of research and recommendations. The same is true if you have multiple funds with the same profile or investing strategy; these will rise and fall together. Too many funds, on the other hand, will give you about the same effect as an index fund, except your expenses will be higher. Buying individual stocks exposes you to company-specific risks, and if you buy a large number of stocks the commissions may cost more than a fund will. The compounding effect is your best friend. A little money invested for a long time equals a lot of money later. The decision to invest in a mutual fund is one you have to make on your own. However, when you try to choose an investment, it’s usually best to seek the guidance of an investment representative. Why? Consider that there are more mutual funds than there are stocks listed on the New York Stock Exchange. While many of these funds share the same objectives, no two are exactly alike. Similarly, as an investor, your goals are unique. An investment representative can help you determine the fund that’s right for you. A mutual fund investor has more options than ever before – stock, bond, and money market funds to satisfy all outlooks, from the most conservative to the most venturesome. Generally speaking, in investment management, intelligently assumed risk creates the opportunity for greater returns. †¢A money market mutual fund aims for current income at minimal risk. †¢A municipal bond mutual fund aims for current tax-free income. †¢Government income funds aim for current income with principal security. †¢Corporate bond funds aim for a high rate of current income. †¢An income fund aims for a higher rate of current income. A balanced fund aims for current income with some capital appreciation. †¢Growth and income funds offer the possibility of more growth than a balanced fund, but probably less income. †¢A growth fund aims for the accumulation of capital, with little or no current income. †¢Aggressive growth funds offer the prospect of maximum capi tal appreciation, with more than average risk. In addition, specialized funds are available – for instance, those that invest only in certain geographic regions or in certain sectors or industries (like health care, technology, or energy). There are even funds that have adopted certain social objectives or that follow specific investment philosophies. For more complete information, including charges and expenses, obtain the mutual fund’s prospectus. Read it carefully before you invest or send money. The Securities and Exchange Commission (SEC) requires every open-mutual fund (where the fund’s managers issue new shares on demand) to provide you with a copy of its prospectus before – or coinciding with – a purchase of shares. A prospectus is a key source of information regarding a mutual fund and often is the best place to start when you are considering investing in one. It will describe the fund’s objectives, risks, and operations. TURNOVER Turnover is a measure of the amount of securities that are bought and sold, usually in a year, and usually expressed as a percentage of net asset value. It shows how actively managed the fund is. A caveat is that this value is sometimes calculated as the value of all transactions (buying, selling) divided by 2; i. e. , the fund counts one security sold and another one bought as one â€Å"transaction†. This makes the turnover look half as high as would be according to the standard measure. Turnover generally has tax consequences for a fund, which are passed through to investors. In particular, when selling an investment from its portfolio, a fund may realize a capital gain, which will ultimately be distributed to investors as taxable income. The very process of buying and selling securities also has its own costs, such as brokerage commissions, which are borne by the fund’s shareholders. The Dalbar Inc. consultancy studied stock mutual fund returns over the period from 1984 to 2000. Dalbar found that the average stock fund returned 14 percent; during that same period, the typical mutual fund investor had a 5. percent return. This finding has made both â€Å"personal turnover† (buying and selling mutual funds) and â€Å"professional turnover† (buying mutual funds with a turnover above perhaps 5%) unattractive to some people. IV REGULATORY FRAME-WORK OF MUTUAL FUNDS Immediately after its constitution, SEBI issued the Mutual Fund Regulations in 1993. However, with the growth of mutual funds, it was imperative that they should follow prepared a ‘Mutual Fund 2000 Report’ and on the basis of this report, it prepared more stringent and comprehensive regulations in 1996, known as SEBI (Mutual Fund) Regulations, 1996. ince then, there have been number of amendments in Regulations, 1996. Besides, SEBI has also issued several guidelines in respect of working of mutual funds. Some of the provisions of the SEBI (Mutual Fund) Regulations, 1996 (as amended from time to time) have been summarized hereunder: 1. The sponsor, who wants to establish a mutual fund, should have a sound track record and a general reputation of fairness and integrity, i. e. , must be in business of financial services for 5 years, and must have contributed at least 40% of the net worth of the Asset Management Company. 2. A mutual fund is constituted in form of trust. The trust shall incorporate an Asset Management Company (AMC). The trustees shall ensure that the AMC has been managing the schemes independently of other activities. 3. Two-thirds of the trustees shall be independent persons and not be associated with the sponsor. 4. The trustees shall ensure that activities of the AMC are in accordance with the Regulations, 1996. 5. The trust shall periodically review the investors’ complaints received and shall be redressed by the AMC. 6. The mutual fund shall appoint a custodian to carry out the custodial services for the schemes. The sponsor or its associates shall no have 50% or more of the share capital of the custodian. 7. No scheme shall be launched by the AMC unless the offer document contains disclosures which are adequate in order to enable the investors to make informed investment decisions. 8. Advertisement in respect of every scheme shall be in conformity with the Advertisement Code. 9. Every close-ended scheme shall be listed at a recognized stock exchange, or there will be a repurchase facility. 10. The close-ended schemes may be converted into open-ended schemes under certain conditions. A close-ended scheme may be allowed to be rolled over if necessary disclosures about NAV, etc. , are made to the unit holders. 11. In case of over-subscription for a new scheme, the applicants applying for upto 5,000 units shall be allotted full. The refund to applicants, if any, shall be made within 6 weeks from the data of closure of the list. 12. No guaranteed return shall be provided in a scheme, unless such return is fully guaranteed by the sponsor or the AMC. 13. An open-ended scheme shall be would up after the expiration of the mixed period, or in case, 75% of the nit holders decide so, after repaying the amount due to the unit holders. 14. The money collected under any scheme shall be invested only in transferable securities in money market or capital market or private placed debts or securitized debts. 15. The mutual fund shall not borrow any money except to meet temporary liquidity needs and borrowing, if any, need not be more than 20% of NAV of the scheme, and for period o f less than 6 months. 16. The funds of a scheme shall not be used in option trading or a carry forward transaction. However, derivatives can be traded by a mutual fund at a recognized stock exchange for portfolio balancing. 7. A mutual fund can enter into underwriting agreement. 18. NAV for each scheme shall be calculated by dividing the total assets of the scheme by the number of outstanding units. The NAV of the scheme shall be published in two daily newspapers at interval of not exceeding one week. 19. In case of open-ended schemes, the repurchase and sale price shall be published at least once a week. 20. The mutual fund shall ensure that the repurchase price of a unit is not less than 93% of NAV and the sale price is not more than 107% of NAV. In case of close-ended schemes, the repurchase price shall not be less than 95% of the NAV. 1. The AMC may charge the mutual fund with investment and advisory fees as per rates prescribed in the Regulations. The issue expenses and redempt ion expenses of a scheme shall not exceed the limits given in the Regulations. 22. The mutual funds are required to raise at least Rs. 20 crores or Rs. 50 crores (for close-ended and open-ended schemes respectively) or 60% of the target amount, otherwise the entire subscription be refunded. Each scheme should have a minimum of 20 investors and not single investor should account for more than 25% of the corpus of the scheme. 23. The unquoted debt instruments shall not exceed 10% in case of growth funds and 40% in case of income funds. 24. Investment in one company under any scheme should be restricted to 5% of the corpus of the scheme. Under all schemes, the investment in one company should be restricted to 5% of the paid-up capital of the company. Total investment in all securities (debts and shares) in one company shall be restricted to 10% of the corpus of the mutual fund. 25. Funds under the same AMC mutual not be lent or invest from one scheme to another, unless the funds are transferred at the prevailing market price. 26. All mutual fund must distribute a minimum of 905 of their profits in any given year. The e3arnings must be segregated as current income, short-term capital gain and long-term capital gain. 27. Trading by mutual funds shall be restricted to hedging and portfolio balancing purposes only. The securities held shall be marked to market by the AMC to ensure full coverage of the investments made in derivative products. 28. Mutual funds are permitted to participate in the Securities Lending Scheme of SEBI under certain guidelines. 29. Mutual funds are allowed to invest in ADRs/GDRs issued by Indian companies. They can also invest in foreign securities under certain conditions and within limits. 30. Mutual funds can also invest up to 10% their funds in equity of listed overseas companies which have a shareholding of at least 10% in an Indian company listed on a recognized stock exchange. 31. The AMC and the trustees are required to review and disclose the performance of their schemes. They are also required to disclose the performance of the benchmark indices. Any of the following indices may be selected for this purpose: BSE Sensex, S&P CNX Nifty, BSE 100, BSE 200 or S&P CNX Nifty 500. 32. Several Guidelines have been prescribed in respect of Advertisement to be issued by mutual funds. Any advertisement, communication, sales literature, or presentation, etc. , should not be misleading. 33. Detailed guidelines are prescribed for valuation of investments. For this purpose, the investments are classified into traded, thinly traded and non-traded investments. 34. Guidelines for identification and provisioning for NPA are also provided. For this purpose, an asset is NPA if the principal/ interest is not received for one quarter. On NPA, no interest shall be accrued. If any interest is already accrued, it shall be provided. A provision @ 10%, 20% or 25% of the book value of NPA is required depending upon the period for which it is NPA. 35. A mutual fund and the AMC shall, before the expiry of 1 month from the close of half year, shall publish its financial results in respect of that half year. MUTUAL FUND INVESTMENT AND INVESTORS’ PROTECTION IN INDIA In case of mutual funds, small investors park their funds in expectation of a suitable return and safety of their funds. Mutual funds take decisions on behalf of the investors. There is a relationship of trust between the mutual fund and the investors. Market regulators should take a cognizance of this fact. The interest of the investors should be protected by framing a comprehensive set of regulatory provision. As the first mutual fund in India, the UTI was created as a statutory body under the UTI Act, the relevant provision regarding investment policies, etc. were all given in the UTI Act itself. However, the position changed after 1992 with the constitution of SEBI. The basic objective of SEBI is to â€Å"protect the interest of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental therewith. So, the regulation of mutual funds activities was make a matter under purview of SEBI. SEBI issued the Mutual Fund Guidelines, 1993 as a first attempt to provide for a regulatory framework to give directions to the functioning of mutual funds and to protect the interest of the mutual funds investors. Keeping in view the changing scenario, SEBI issued a new set of Mutual Funds Guidelines in 1996. A detailed list of the provisions of Guidelines, 1996 is already given in this chapter. Some other provision specifically dealing with investors protection are: (i)Each mutual fund must be registered with SEBI. The sponsor must have a sound track record and experience in financial services of at least 5 years. (ii)Number of terms and conditions have been provided in respect of Asset Management Company (AMC). The Directors of the AMC should here adequate professional experience in finance and financial services. (iii)The custodian of the mutual fund should also be approved and registered with SEBI. (iv)No mutual fund scheme can be launched unless approved with the trustees. (v)Minimum and Maximum amount to be raised under the scheme should be notified. (vi)Lot of disclosures are required in respect of the scheme in the prospectus. vii)No scheme with a guaranteed return can be issued unless such return is guaranteed by the AMC or the sponsor. (viii)Periodic report in respect of each of the scheme is to be published. Any information that has an adverse bearing on the investment should also be disclosed. (ix)There are investment norms provided for mutual fund investment with a view to contain t he investment risk. Investors’ interest is protected by prohibiting mutual funds from excessive risk exposure. (x)SEBI can impose several types of monetary penalties for violations of SEBI Regulations and Guidelines.