Types of Mutual funds

WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS

A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names. Mutual Funds can be classified into various categories under the following heads:-

(A) ACCORDING TO TYPE OF INVESTMENTS :- While launching a new scheme, every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme. Thus, the various kinds of Mutual Fund schemes as categoried according to the type of investments are as follows :-

(a) EQUITY FUNDS / SCHEMES

(b) DEBT FUNDS / SCHEMES (also called Income Funds)

(c ) DIVERSIFIED FUNDS / SCHEMES (Also called Balanced Funds)

(d) GILT FUNDS / SCHEMES

(e) MONEY MARKET FUNDS / SCHEMES

(f) SECTOR SPECIFIC FUNDS

(g) INDEX FUNDS

B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME :- While launching a new schemes, Mutual Funds also declare whether this will be an open ended scheme (i.e. there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up. Thus, according to the time of closure schemes are classified as follows :-

(a) OPEN ENDED SCHEMES

(b) CLOSE ENDED SCHEMES

C) ACCORDING TO TAX INCENTIVE SCHEMES :- Mutual Funds are also allowed to float some tax saving schemes. Therefore, sometimes the schemes are classified according to this also:-

(a) TAX SAVING FUNDS

(b) NOT TAX SAVING FUNDS / OTHER FUNDS

(D) ACCORDING TO THE TIME OF PAYOUT :- Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (i.e. dividend etc.). The categories are as follows :-

(a) Dividend Paying Schemes

(b) Reinvestment Schemes

The mutual fund schemes come with various combinations of the above categories. Therefore, we can have an Equity Fund which is open ended and is dividend paying plan. Before you invest, you must find out what kind of the scheme you are being asked to invest. You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes.

Share Tips Info(BSE,NIFTY)

Bombay Stock Exchange




The Bombay Stock Exchange or BSE as it is most popularly known is the oldest stock exchange in Asia. In terms of listed companies (4, 800 by August 2007), the Bombay Stock Exchange is the biggest in the world. Being located at the Dalal Street in Mumbai, the stock exchange enjoys the benefits of the financial capital of India. The stock exchange was established in the year 1875 as "The Native Share & Stock Brokers Association." Bombay Stock Exchange is the first stock exchange in India to obtain permanent recognition from the Government of India under the Securities Contracts (Regulation) Act, 1956. The earlier the exchange was operated as the Association of Persons, it is now incorporated under the Companies Act, 1956. In October 2007 the market capitalization of the companies listed on the BSE was US$ 1.61 trillion that have made it the largest market in the South East Asia in terms of market capitalization.


The exchange is managed professionally under the direction of its Board of Directors that is made of eminent people from the industries and commerce and headed by the Managing director and CEO. The Board formulates all the strategies and keeps an over all control on the functioning of the exchange. The policy of the exchange has been formed to ensure optimum integrality and transparency in the processes. The Bombay stock exchange has nation presence in around 417 cities and towns in India. The exchange has been providing the investors an efficient market for trading in equity, debt instruments and derivatives.


The BSE SENSEX that is also called the "BSE 30” is made of thirty scripts. The index is followed extensively in Indian capital market and it is regarded as the index of the Indian capital market. The Bombay Stock Exchange is the eminent stock exchange in India and the SENSEX of this exchange is recognized and followed all over the world. The exchange has played a pivotal role in shaping the capital market in India. The companies that are listed in the BSE index have been changed only a few times and they account for about one-fifth of the total market capitalization of the Bombay Stock Exchange. Though the SENSEX is the primary and the most widely accept index of BSE there are few indices as well, including BSE 500, BSE 100, BSE 200, BSE PSU, BSE MIDCAP, BSE SMLCAP, BSE BANKEX, BSE Tech, BSE Auto, BSE Pharma, BSE FMCG, BSE Consumer Durables and BSE Metal.

NIFTY

NIFTY is a prime index of the ‘The National Stock Exchange of India Limited’, the Mumbai based stock exchange. NSE is the largest stock exchange in India in terms of daily turnover and trading volume in both equity and derivative trading. NSE is owned by the premiere financial institutions, banks, insurance companies and other financial intermediaries in India. But the ownership and the management of the exchange work as separate entities. The NSE S&P CNX Nifty 50 that is popularly known as NIFTY is the key index of the NSE.

NIFTY is an index that is made of 50 major stocks listed at the NSE in terms of market capitalization. NIFTY is a well diversified index as these 50 companies are from 21 sectors. The index is owned and managed by India Index Services and Products Ltd. (IISL). IISL, which is a joint venture of NSE and CRISIL is the first specialized company in India on Index. The company has a marketing and licensing agreement with Standard & Poor's (S&P) - the world market leader in index services. The NIFTY index is used for different purposes like benchmarking fund portfolios, index based derivative trading and index funds.

NIFTY is one of the leading index in the Indian stock market and the prime index of the NSE. If you consider all the stocks in the NIFTY it accounts for almost 50% of the total traded volume in the NSE. These NIFTY stocks accumulatively represent about 58.64% of the total market capitalization as on 31st March, 2008. The impact cost of the S&P CNX Nifty index is 0.15% for a portfolio size of Rs.2 crore. The NIFTY index is professionally maintained by IISL which is the premiere index management company in India. The NIFTY index is ideal for derivative trading and huge number of investors trade in NIFTY derivatives on regular basis.

History of the India Stock Market

The Indian Stock Market has a long and rich history. Originally based on what would become the London Stock Exchange, traders gathered to trade local stock and talk business. Eventually the Indian Stock Market became not just another financial arena in southern Asia, but the most important financial arena outside of Japan. Today the Indian Stock Market still holds prominence in the region.

Origins:
The Bombay Stock Exchange is Asia's oldest stock market. This stock exchange was established in 1875.

History:
The Bombay Stock Exchange began as the Native Share and Stock Brokers Association. This exchange obtained permanent recognition in 1956 from the Indian government. The Bombay Stock Exchange started as an open outcry system where traders would call their orders out and wait for a response.

Meeting Places:
Originally the traders met under banyan trees to do business; as the group grew in numbers these traders needed to move to different locations. A permanent location was found in 1874.

Prominence:
The exchange has become the largest in the number of listed companies and fifth largest in the amount of transactions.

Organization Change:
At first the Bombay Exchange was an Association of Persons, and remained so until the 21st century. In 2002 the exchange became a corporation.


STOCK MARKET INDIA

How to Get Started Investing in the Stock Market

Today's hot stock market is both inviting and intimidating to new investors. Here's how to start an investment portfolio of your own.

Instructions:

1. • 1
     Get educated: Read about stocks and the market, take a seminar or class on investing and review online financial sites.
   • 2
     Develop financial goals and an investing and stock-picking strategy.
   • 3
     Research individual stocks by reading annual reports, quarterly reports and other documents on file with the Securities and Exchange Commission. Look them up online at www.freedgar.com
   • 4
     Invest in what you know. Consider the stocks of local companies with which you are familiar and in which you have confidence.
   • 5
     Check out the holdings of some successful mutual-fund companies. If they are winning with particular stocks, perhaps you will too.
   • 6
     Diversify. Avoid putting your money in just one or two stocks or, for that matter, in one or two industries.
   • 7
     Use a discount brokerage to buy stocks if you are confident in your investment skills and have the time to do your own investing. You'll save on commissions.
   • 8
     Buy stocks that you will feel comfortable holding for three to five years. Resist the temptation to dump a stock the moment its price drops a few percentage points. Give it a chance.

Tips & Warnings:

• Know your appetite for risk before you start investing. The stock market can be a roller-coaster ride.
• If you don't have time to research and review stocks daily, try investing in a mutual fund account, at least to get started.
• Look for value. Use price-earnings ratios, usually reported in newspapers' stock tables, to compare a stock to industry norms before you buy.
• Take advantage of investing through 401(k) plans, Individual Retirement Accounts and Keogh plans. These provide tax breaks to the investor.
• Don't think that by investing all your money today, you will be a millionaire next month. Invest for the long term.

About NASDAQ

The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association ofSecurities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of January 13, 2011, there are 2,872 listings.The NASDAQ has more trading volume than any other electronic stock exchange in the world. It was founded in 1971 by the National Association of Securities Dealers (NASD), who divested themselves of it in a series of sales in 2000 and 2001. It is owned and operated by the NASDAQ OMX Group, the stock of which was listed on its own stock exchange beginning July 2, 2002, under the ticker symbol NASDAQ: NDAQ. It is regulated by the Financial Industry Regulatory Authority (FINRA). With the incomplete purchase of the Nordic-based operated exchange OMX, following its disagreement with Borse Dubai, NASDAQ is poised to capture 67% of the controlling stake in the aforementioned exchange, thereby inching ever closer to taking over the company and creating a trans-atlantic powerhouse. The group, now known as Nasdaq-OMX, controls and operates the NASDAQ stock exchange in New York City – the second largest exchange in the United States. It also operates eight stock exchanges in Europe and holds one-third of the NASDAQ Dubai stock exchange. It has a double-listing agreement with OMX, and will compete with NYSE Euronext group in attracting new listings. Bernie Madoff is a co-founder of Nasdaq, a former Chairman of the NASD. When the NASDAQ stock exchange began trading on February 8, 1971, it was the world's first electronic stock market. At first, it was merely acomputer bulletin board system and did not actually connect buyers and sellers. The NASDAQ helped lower the spread (the difference between the bid price and the ask price of the stock) but somewhat paradoxically was unpopular among brokerages because they made much of their money on the spread. NASDAQ was the successor to the over-the-counter (OTC) system of trading. As late as 1987, the NASDAQ exchange was still commonly referred to as the OTC in media and also in the monthly Stock Guides issued by Standard & Poor's Corporation. Over the years, NASDAQ became more of a stock market by adding trade and volume reporting and automated trading systems. NASDAQ was also the first stock market in the United States to start trading online. Nobody before them had ever done this, highlighting NASDAQ-traded companies (usually in technology) and closing with the declaration that NASDAQ is "the stock market for the next hundred years." Its main index is the NASDAQ Composite, which has been published since its inception. However, its exchange-traded fund tracks the large-cap NASDAQ-100 index, which was introduced in 1985 alongside the NASDAQ 100 Financial Index. Until 1987, most trading occurred via the telephone, but during the October 1987 stock market crash, market makers often didn't answer their phones. To counteract this, the Small Order Execution System (SOES) was established, which provides an electronic method for dealers to enter their trades. NASDAQ requires market makers to honor trades over SOES. In 1992, it joined with the London Stock Exchange to form the first intercontinental linkage of securities markets. NASD spun off NASDAQ in 2000 to form a publicly traded company, the NASDAQ Stock Market, Inc. In 2006 NASDAQ changed from stock market to licensed national exchange. On November 8, 2007, NASDAQ bought the Philadelphia Stock Exchange (PHLX) for US$652 million. PHLX is the oldest stock exchange in America—having been in operation since 1790. To qualify for listing on the exchange, a company must be registered with the United States Securities and Exchange Commission (SEC), have at least three market makers (financial firms that act as brokers or dealers for specific securities) and meet minimum requirements for assets, capital, public shares, and shareholders. In February, 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Börse, speculation developed that Nasdaq and IntercontinentalExchange (ICE) could mount a counter-bid of their own for NYSE. Nasdaq could be looking to acquire the American exchange's cash equities business, ICE the derivatives business. As of the time of the speculation, "NYSE Euronext’s market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion."[6] Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Merc to join in what would be probably have to be, if it proceeded, an $11-12 billion counterbid.