MUTUAL FUNDS COMPANIES_PART 2.pdf

Financial Statement Analysis for Mutual Fund Companies Mutual Funds ► Investment Mutual Fund Company ks c. o St Co in A E vehicle made up of pool of monies collected from investors for the purpose of investing in securities in stocks, bonds, and money markets. Z Shares Bo in nds Co.X M Mutual Funds...

Financial Statement Analysis for Mutual Fund Companies Mutual Funds ► Investment Mutual Fund Company ks c. o St Co in A E vehicle made up of pool of monies collected from investors for the purpose of investing in securities in stocks, bonds, and money markets. Z Shares Bo in nds Co.X M Mutual Funds ► Operated Managers by Money a basket of securities structured and maintained to match investment objectives. ► (ex: Growth, Liquidity) ks c. o St Co in A E ► Portfolio: Mutual Fund Company Z Shares Bo in nds Co.X M Mutual Funds ► Each ► Net asset value per share (NAVPS). Mutual Fund Company ks c. o St Co in A E shareholder participates proportionately in the gains/losses of the fund. Z Shares Bo in nds Co.X M Mutual Funds Net asset value per share (NAVPS). Market Capitalization # of shares outstanding Mutual Funds Reason? ! ks c. o St Co in A E ►Diversification Mutual Fund Company Z Shares Bo in nds Co.X M Mutual Funds Personnel: ► ► Act in the best interest of the shareholders. ► The investment advisor ks c. o St Co in A Z Analyst ► Recommend a “pick” E ► Fund Manager Mutual Fund Company Shares Bo in nds Co.X M Mutual Funds Personnel: ► Fund Accountant ► Calculation of the NAVPS Compliance officers and attorneys ► Regulatory and Compliance Requirements. ks c. o St Co in A E ► Mutual Fund Company Z Shares Bo in nds Co.X M Mutual Funds Ongoing annual fees ◈ Fees ◈ fees Annual Operating Management fees Transaction fees ◈ Commissions ◈ Purchase/Redemption fees ◈ Early withdrawal penalty Front-end loads Back-end loads Mutual Funds Advantages: Disadvantages: ► Diversification ► Fluctuating returns ► Economies of scale ► Cash drag ► Easy access ► Costs ► Professional ► Di“worsification” management ► Variety and choice ► Transparency ► Fund management ► Evaluating funds Mutual Funds How do investors earn: Dividends paid to the MF ► Fund Securities increase in price, then sell it. ► Fund Securities increase in price, then hold it. ks c. o St Co in A E ► Mutual Fund Company Z Shares Bo in nds Co.X M Mutual Funds - Kinds of Mutual Funds ► Asset allocation funds ► Equity Funds ► International Funds ► Fixed Income Funds ► Global Funds ► Balanced Funds ► Special Sector Funds ► Money Market Funds ► Regional Funds ► Bond Funds ► Ethical Funds ► Index Funds ► Exchange Traded Funds Mutual Funds Mutual Funds Mutual Funds Mutual Funds Mutual Funds Mutual Funds Expense Ratio Annual Operating Expenses (Management Expense Ratio) Average value of assets under management Management fees, distribution and services, accounting fees, other expenses 5% 7. 0 to e v i % s.50 en 0 p : d ex o s i Go 0% 5. >1 Mutual Funds