Financial Products

Financial Products — No Comments
19
Feb 11

Who should Invest in Growth Mutual Funds

Mutual fund refers to a trust which pools the money from several small investors and invests that amount into stock market for generating returns for the investors. Growth mutual funds are those mutual funds which are aggressive in nature and the objective of such mutual funds is to provide capital appreciation for the investors.

Growth mutual funds are not ideal for everyone, rather it suits only some class of investors only which include –

  1. Young investors who have just started earning can invest into growth mutual funds, since growth mutual funds primarily invest into equities therefore they are risky because equity markets are bound to be volatile. Hence it is better to stay away from growth mutual funds if you are old age and your source of income is pension only.
  2. Investors whose objective is capital appreciation rather than recurring income can invest into growth mutual funds because growth mutual funds over a period of 3 to 5 years provide better returns in comparison to income mutual funds.
  3. People who have excess cash and time horizon of 5 years should invest into growth mutual funds because if one is having excess cash then he or she can invest into growth mutual funds, as growth mutual funds do not provide immediate return and therefore it is important to have longer time horizon.
Financial Products — No Comments
3
Jan 11

Kotak Multi Asset Allocation Fund

Kotak Mahindra Asset Management Company has launched a new fund offer or NFO called kotak multi asset allocation fund. The investment objective of this new scheme is to generate income by investing around 70 to 80 percent in debt and money market securities, and reaming in equity markets and in order to provide diversification to investors this fund will also make investments in Gold ETFs.

The new fund offer (NFO) will be open for subscription from 31 December 2010 to 14 January 2011. The price per unit for this New Fund Offer is Rs 10 per unit. The minimum subscription amount is Rs. 10,000 for this NFO. The investors can purchase these units under 4 schemes

1. Kotak Multi Asset Allocation Fund – Growth Plan

2 Kotak Multi Asset Allocation Fund – Annual Dividend Plan

3. Kotak Multi Asset Allocation Fund – Quarterly Dividend Plan

4. Kotak Multi Asset Allocation Fund – Monthly Dividend Plan

The Entry load for investing in Kotak Multi Asset Allocation Fund is nil and exit load is 1 percent if it is redeemed before 1 year of its allotment, and if it is redeemed after 1 year exit load is nil.

Financial Products — No Comments
31
Dec 10

C Mahendra Exports Ltd IPO

With prices of gold and other precious metals touching new highs, companies which are into jewellery business are planning to expand and therefore a company named C Mahendra Exports Ltd is coming with an IPO size of 1.5 Crore equity shares of face value of Rs 10 each. The price band for this issue has been fixed at between Rs 95 to Rs 110 per equity share. The issue opens for subscription on 31st December 2010 and it will close on January 6, 2011. The excepted listing date of this issue will be on or after 18 January on both Bombay Stock Exchange and National Stock Exchange.

C Mahendra Exports Ltd, an integrated diamond and diamond jewellery company encompassing sourcing of rough diamonds, trading of rough and polished diamonds, processing of diamonds and manufacture of diamond jewellery. The company plans to utilize the proceeds of the issue for setting up a diamond processing unit at Gujarat and setting up a jewellery manufacturing unit at Mumbai. The issue will constitute 25% of the fully diluted post issue paid-up equity share capital of the company. ICRA Limited has assigned an IPO rating 2 to C Mahendra Exports Ltd IPO.

Financial Products — No Comments
25
Dec 10

Features of Floating Rate Note

Floating rate loan is a type of bond which has a variable interest rate, which is calculated as a fixed percentage over a benchmark rate of interest. The interest rate on floating rate note changes in sync with the benchmark rate of interest. So for example if a floating rate note carries a spread of 1 percent over the benchmark rate of interest and benchmark rate of interest is 10 percent then floating rate note will have 11 percent rate of interest. Given below are some of the features of floating rate note -

1. Floating rate note are issued at the face value.

2. The interest rate of floating rate loan is fixed as a percentage over a benchmark rate. The benchmark rate may be a bank rate, Treasury bill rate, LIBOR rate etc…..

3. Floating rate note can have many variations like it can be issued as Perpetual Notes, Variable Rate Notes, Capped floating rate note, Floored floating rate note etc…

4. The interest payment on floating rate note is made on half yearly basis.

Financial Products — 1 Comment
18
Dec 10

Mortgagor and Mortgagee

Mortgage refers to promise made by the borrower of the money to the lender of money by transferring the ownership in the property of the borrower to the lender of the money. There are basically two parties to mortgage one is called mortgagor and other is mortgagee. Let’s look at both of them one by one

1. Mortgagor – Mortgagor in simple words is the borrower who has taken the loan from the lender. Mortgagor is the one who pledge the security for the debt which he or she has taken from the Mortgagee. Mortgagor will sign or authenticate the documents and give it to the Mortgagee because it is a necessary condition for be mortgage to be legally enforceable by the court of law.

2. Mortgagee – Mortgagee is one who has given the loan to the mortgagor or borrower, and for giving this loan the mortgagee demands a security from the mortgagor. By giving a security the mortgagor is in a way promising that he or she will make a repayment of the loan which he or she has taken because in the event of any default by the mortgagor, the mortgagee will sell the security in order to recover the amount which is due from the borrower or mortgagor.

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