NCFM Exam Preparations: Mutual Funds Beginners Module

Asset management companies manage investors' money on behalf of trustees and charge fees. They float and manage mutual fund schemes under SEBI rules, with boards including independent directors.

The asset management company manages investors' money through fund managers who must have the highest integrity; it appoints intermediaries, prepares the offer document, and charges fees within SEBI limits.

Learn how a new fund offer (NFO) launches a new mutual fund scheme after trustees and SEBI approval, inviting investors to subscribe via cheques, demand drafts, or online.

Explore how equity funds invest in Indian company shares, guided by fund managers. Earn tax benefits by having at least 65% of assets in Indian equities.

Compute tracking error as the standard deviation of daily differences between the portfolio and index returns, and show how intraday trading, cash positions, dividends accrued, and expenses influence it.

Actively manage diversified large cap funds to select top, high market capitalization stocks with strong management and globally competitive products, aiming for stability but without guaranteed high returns.

Understand midcap funds investing in emerging blue chips and CNX midcap index tracking, either actively or passively. Explore sectorial funds investing in a sector, with diversification limits and higher risk.

Explore arbitrage funds, multicap funds, quant funds, and p e ratio funds, and learn how price differentials, system-driven buy/sell calls, and p e ratios shape performance.

Explore other equity schemes like international equities funds and funds of funds, and learn growth schemes and ELSS with tax benefits and a three-year lock-in.

Explore growth and value investing, including how undervalued stocks create opportunities and how assets under management and net asset value govern fund size.

Analyze how asset under management drives portfolio turnover, affecting buying and selling pressure, costs for the scheme, and fund manager decisions, with high and low AUM scenarios and peer comparisons.

Authorized participants act as market makers, posting bids and asks to provide liquidity and earn the bid-ask spread, while NAV aligns through arbitrage; custodians keep records, with sub-custodians possible.

Explore debt funds, their features, risks, pricing, and types; learn how mutual funds provide access to debt markets and key terms like face value, coupon, and maturity.

Explore fixed maturity plans, a closed-ended debt mutual fund where the fund manager selects debt securities matching the scheme’s maturity, with non-guaranteed, pre-tax indicative yields.

Explore liquid funds, a money market mutual fund with under-one-year maturities and about 40% of assets, offering lower risk and better returns than bank current accounts.

Explore why liquid funds with maturities of 182 days or less carry no interest rate risk, as shorter average maturities minimize price changes and marking to market becomes unnecessary.

Explore capital gains taxation for mutual funds, contrasting equity and debt schemes, long-term vs short-term gains, indexation benefits, and international funds under sebi rules.

compare fixed maturity plans with bank fds using an excel model to reveal why fmps are popular, highlighting dividend vs growth options and post-tax returns.

Understand SIP as a hassle-free, auto-debited monthly investment in mutual funds with rupee-cost averaging and compounding; explore STP transfers from debt to equity and SWP withdrawals.

Explore how dividend reinvestment buys additional units without changing nav, while comparing growth and dividend payout options for long-term appreciation and tax efficiency.