Tag Archives: Fund

General Investing

Sundaram Mutual Fund Systematic Investment Plan

Sundaram BNP Paribas Mutual Fund has launched several schemes which are generating returns more than the benchmark rates since inception. The fund managers for these schemes are more experienced and they take wise decisions in difficult times. The systematic investment plans launched by Sundaram mutual fund is one of the most successful schemes. This type of scheme is similar to investing in a bank recurring deposit. This plan generates more consistent returns when compared to the regular schemes as this type of investment has many advantages.

Sundaram SIP Plans:

You can make monthly payments which will reduce your burden of making single payments at a single time.
As you are investing each month, you buy units at different cost. Once you calculate the average cost of the units bought by you, the cost will be less when compared to regular purchase. This is called averaging. So this would also help you to earn more returns.
The minimum investment amount would be very less so that more retail investors and low income persons can participate in this scheme.
There are variety of payment options like post dated cheques and sip auto debit facility. You can issue post dated cheques for the monthly instalments. The company will send the cheques for clearing on the corresponding dates. Once they receive the payments they will buy additional units for your folio and will send you the updated statement. The units will be bought on the current NAV.

Next Step: Get More Details and Start Investing:

General Investing

SBI Mutual Fund Systematic Investment Plan

This fund was launched by the SBI mutual fund, to give the investors, a high opportunity for growth. It is one of the 5 Magnum Sector Funds umbrella launched by SBI. The funds were mostly invested in the equities which is a high risk investment. Only 0 to 10% of the funds were invested in other money markets.

SBI contra fund is a open ended equity scheme which invests in equities which are out of favour in the market. This fund was launched in 1999, with a minimum application amount of Rs 3000. There is no entry load for investing in this fund. But if you withdraw your fund within one year of investment, then you will be charged 1% of the amount as exit load. If you withdraw your amount after one year, then you will not be charged any exit load.

SBI mutual fund systematic investment plan is available for this scheme also. Under the recently launched “SBI Chota SIP” scheme, you can invest a minimum amount of Rs 100 per month or under systematic investment plan scheme you can invest a minimum amount of Rs 500 per month. These investments can be made either monthly or quarterly in advance. You can also choose sip auto debit facility for making monthly payments. For availing auto debit facility, you have to sign the bank authorization form along with the mutual fund application form. Once your application form is processed, your will get your updated statement. Once the monthly payment starts, you will get an updated statement every month with the updated units purchased in the folio.

Market Analysis

The Difference Between a Money Market Account And a Money Market Fund

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Many investors do not realize that there are differences between a money market account and a money market fund. While the differences are subtle, they both have faintly distinct levels of risk. Due to this variance in risk, there is also a small difference in the money market rates offered between the two financial products. Investors should have an understanding of what these financial products are. Knowing how banks use these funds will help investors make the most informed decisions about how to allocate their investment capital based on the amount of risk they want to assume.

A money market account is very similar to a savings account at a bank. Most money market deposit accounts typically can have a minimum opening deposit and can provide customers with the ability to write checks against the account. A money market deposit account is virtually a risk free investment because the bank uses these deposits for cash equivalent investments used in their banking operations. The money market account deposits help the bank offer loans to its customers for homes, cars, and other purchases while providing investors good money market rates of return.

Money market funds carry with it a slightly higher risk profile because of the underlying investments purchased with the deposits in order to earn a higher rate of return. While with money market funds, capital is placed in low risk investments such as Treasuries and short-term debt instruments, these funds are still considered a very safe financial product for investors to own. Most money market funds have a set share price of $1 which does not change. Capital appreciation or dividends earned are either disbursed to investors or invested as new shares of the money market fund.

Money market deposit accounts and money market funds are very similar in design and the type of protection they offer investors. Depending on the amount of risk an investor wants to assume, money market accounts and money market funds offer excellent options for short-term investments with little risk to their principal.

General Forex

China Foreign Exchange Trade System & National Interbank Fund – Forex Options Market Overview

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China Foreign Exchange Trade System & National Interbank Fund

The forex options market started as an over-the-counter (OTC) financial vehicle for large banks, financial institutions and large international corporations to hedge against foreign currency exposure. Like the forex spot market, the forex options market is considered an “interbank” market. However, with the plethora of real-time financial data and forex option trading software available to most investors through the internet, today’s forex option market now includes an increasingly large number of individuals and corporations who are speculating and/or hedging foreign currency exposure via telephone or online forex trading platforms. China Foreign Exchange Trade System & National Interbank Fund

Forex option trading has emerged as an alternative investment vehicle for many traders and investors. As an investment tool, forex option trading provides both large and small investors with greater flexibility when determining the appropriate forex trading and hedging strategies to implement.

Most forex options trading is conducted via telephone as there are only a few forex brokers offering online forex option trading platforms.

Forex Option Defined – A forex option is a financial currency contract giving the forex option buyer the right, but not the obligation, to purchase or sell a specific forex spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the forex option buyer pays to the forex option seller for the forex option contract rights is called the forex option “premium.”

The Forex Option Buyer – The buyer, or holder, of a foreign currency option has the choice to either sell the foreign currency option contract prior to expiration, or he or she can choose to hold the foreign currency options contract until expiration and exercise his or her right to take a position in the underlying spot foreign currency. The act of exercising the foreign currency option and taking the subsequent underlying position in the foreign currency spot market is known as “assignment” or being “assigned” a spot position. China Foreign Exchange Trade System & National Interbank Fund

The only initial financial obligation of the foreign currency option buyer is to pay the premium to the seller up front when the foreign currency option is initially purchased. Once the premium is paid, the foreign currency option holder has no other financial obligation (no margin is required) until the foreign currency option is either offset or expires.

On the expiration date, the call buyer can exercise his or her right to buy the underlying foreign currency spot position at the foreign currency option’s strike price, and a put holder can exercise his or her right to sell the underlying foreign currency spot position at the foreign currency option’s strike price. Most foreign currency options are not exercised by the buyer, but instead are offset in the market before expiration.

Foreign currency options expires worthless if, at the time the foreign currency option expires, the strike price is “out-of-the-money.” In simplest terms, a foreign currency option is “out-of-the-money” if the underlying foreign currency spot price is lower than a foreign currency call option’s strike price, or the underlying foreign currency spot price is higher than a put option’s strike price. Once a foreign currency option has expired worthless, the foreign currency option contract itself expires and neither the buyer nor the seller have any further obligation to the other party.

The Forex Option Seller – The foreign currency option seller may also be called the “writer” or “grantor” of a foreign currency option contract. The seller of a foreign currency option is contractually obligated to take the opposite underlying foreign currency spot position if the buyer exercises his right. In return for the premium paid by the buyer, the seller assumes the risk of taking a possible adverse position at a later point in time in the foreign currency spot market. China Foreign Exchange Trade System & National Interbank Fund

General Forex

How To Start A Forex Hedge Fund – Forex Disclosure Documents

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How To Start A Forex Hedge Fund

Overview of Forex Disclosure Documents

Although there are currently very few details concerning the upcoming Forex registration rules, many Forex managers are preparing for registration, including the preparation of the Forex disclosure documents. Whether the Forex manager is a “Forex CTA” and only provides advice to individual accounts, or if the manager is a “Forex cpo” and provides advice to a fund, the manager will need to have some sort of disclosure document to provide to the investor. This document will need to be prepared in accordance with the NFA regulations and will also need to be approved by the NFA prior to giving them to potential investors. The disclosure documents will generally need to be prepared by the Forex attorney.

Selecting the Forex Attorney

A good Forex attorney is well versed in all aspects of the Securities laws and has experience with Forex managers. It is also helpful when the attorney understands the business aspects of the Forex manager’s trading program. For example, it is often helpful if the attorney has taken and passed the Series 3 exam (and, soon, the Series 34 exam). You will also want to talk to the attorney about the process and timeline of both the Forex registration process as well as the disclosure document creation process. After you have decided on a Forex attorney, you will likely sign an engagement letter and submit a retainer payment – they the attorney will begin drafting the offering documents. How To Start A Forex Hedge Fund

Disclosure Documents

There are three main parts of a Forex fund’s offering documents – the private placement memorandum (PPM, sometimes also called the offering memorandum), the limited partnership agreement and the subscription documents. Below, we have detailed the important parts of these items:

Forex PPM – like a regular hedge fund (especially a commodity hedge fund), the Forex fund PPM will include the following sections:

Legal Disclosures
Discussion of the Forex Investment Program
Background of the Forex Manager
Risks Factors of the Forex Trading Program
Discussion of the Potential Conflicts of Interests
Descriptions of the service providers – a discussion of the service providers will included in the offering documents. This includes the attorney, the administrator, the auditor and the Forex dealer member (FDM). Current pending litigation of the FDM will also need to be disclosed – your attorney will gather these details.
Performance Results – the NFA is expected to require in depth information about the fund’s past performance. These requirements are likely to be substantially similar to the current requirements for non-Forex CPOs.
Any Other Relevant Information How To Start A Forex Hedge Fund

Forex LPA – these are the official governing legal documents of the fund. Typical provisions will include:

Preamble
Discussion of Rights and Duties of Investors (contributions, redemptions, etc.)
Discussion of Rights and Duties of Manager (compensation, duties to fund/investors, conflicts of interest)
Winding Down Provisions
Etc.

Forex Subscription Documents – the subscription documents are important because they help the manager to make sure the offering complies with all appropriate laws with regard to an investor’s suitability. Common subscription document elements are:

Investor Information Request (name, contact information, investment experience, etc.)
Discussion of Investor’s Suitability (primarily net worth confirmations)
Subscription agreement – agreement investor signs before he can become an investor in the fund
Limited Partnership Agreement – agreement in which the investor agrees to abide by the legal provisions contained in the LPA How To Start A Forex Hedge Fund