Monthly Salary - 29000 Balance - 14700

Monthly Expense
Sr. no. Expense name Expense amount Total Type Description Home expense
1 net bill 200 28800 H Insurance
2 tv bill 400 28400 H Saving
3 gas bill 800 27600 H Home
4 electricity bill 1500 26100 H Personal
5 Home Expense 1500 24600 H
6 gita loan 5000 19600 P
7 icici recurring 2000 17600 S
8 boi 2000 15600 S
9 lic 900 14700 I

INVESTMENT GAPS
Future investments plan
Sr. no. Expense name Expense amount Total Type Description
SAVING
1 RD HDFC 1000
2 mutual fund 4000
INSURANCE
3 Mediclaim 500
HOME
4 saving for travelling 3000
PERSONAL
5 Mobile Loan 2500 Samusng m51
6 food expense 3000 food for gym
7 Gym 300 fees
8 Travelling 1000
9 Mobile recharge 200
10 Gita Loan 5000 12000

Advance Future investments plan

Sr. no. Expense name Expense amount Total Type Description
Sr. no Expense name Expense amount
Pradhanmantri
1 Pension Plan IN July Month
2
3
4
5
6
7
Type Count Total Target% Target Remaining
I 1 900 7 2030 1130
S 2 4000 31.1 9019 5019
H 3 4400 20 5800 1400
P 1 5000 25 7250 2250
14300
 Personal Finance Rule
SALARY 29000
One day salary 966.666666666667

First Method Save 30% of salary

30% of my salary is 8700
6 month 52200

Rule to follow 50-30-20 Rule

50
30
20

50-30-20 Rule
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ENNE
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 NE
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 MUTUAL FUNDS
BEFORE INVESTMENT WE NEED TO HAVE A GOAL
LET SAY I HAVE FOLLOWING GOAL
1 BUY HOME COST 25 LAC IN NATIVE VILLAGE WITHIN 10 YEARS

TYPES OF MUTUAL FUNDS

1 DEBT MUTUAL FUND
2 EQUITY MUTUAL FUND

DEBT MUTUAL FUND

1 DEBT HAS LESSER RISK
2 MEDIUM RETRUN
2 TYPE OF DEBT FUNDS ACCORDING TO PERIOD OF TIME TO INVEST

EQUITY MUTUAL FUND

1 HAS MORE RISK
2 HAS MORE RETURN
3 TYPES
 CALCULATE MUTUAL FUND

SUPPOSE YOUR GOAL IS TO BUY A NEW CAR WOTH 5 LAC

LET SAY YOU INVEST 15000/- Rs. Every month for 3 year
Suppose your expected return is 7% then after 3 year total saving would be 5 lac rupees
What is Risk
Risk arises in mutual funds owing to the reason that mutual funds invest in a variety of financia
fluctuating owing to a lot of factors which may result in losses. Hence, it is essential to identify

Due to price fluctuation or volatility, a person’s Net Asset Value comes down, resulting in a los
Hence, it becomes essential to identify the risk profile and invest in the most appropriate fund

TYPE OF RISK
1. We all w
2. Market
3. There ar
so on.
1. Market Risk 4.Market r
for the thi

2. Concentration Risk

1. Interest
2. They are
3. For exam
the individ
3. Interest Rate Risk 4. The only
the investe

Liquidity risk
find a buyer

In mutual fu
funds (ETFs)
4. Liquidity Risk
Sometimes d
have a very d
 Sometimes d
have a very d

Credit risk m
agencies on

Mutual Fund
sometimes i
5. Credit Risk This would in
So, right now
your wealth
 

SR. NO. TYPES DESCRIPTION

1 LIQUID FUNDS 1. Is a type of Mf
2.Are debt fund
3. Money are not invested in Companies
4. Money are invested in bond, goverment security, debenture
5. has fixed returns
6. Invest in short term loans, bond
7. Money can be withdraw anytime
8. fd and liquid fund has similar return from 7-8% return
9. FD has no risk, but LF has low risk, but it is still safe.
10. What is a advantage of Liquid fund over FD?
a. Flexibility
>> Money can be withdraw anytime
>> Any amount of money can be deposit
11. Auto Sweep
a. When you save an amount into the bank, that specific amount of
money become FD. Let say when you save 5000 rupees to your bank account,
the FD is credited for that amount. For next 5000 another FD is created. Bank
will give an interest for FD.
b. Money can be withdrawn here
c. Has low risk as Liquid fund

2 Ultra Short Term 1. Overnight funds - If you to save money for a week then opt for Overnight
funds. SBI overnight are best in 2021.
2. Liquid Fund - For 3 month
3. Money Market Funds - Upto 12 month
4. Ultra Short fund - If you want to save money for 4 to month with a goal of
higher Interest. It has higher risk.
5. Low duration fund - Low duration fund. It has higher risk.
6. Never choose a fund with Yield to maturity more than 5 because it has
highest risk. Next choose a fund with higher Net Assets(select the avg let say
3). The look for Sharp Ratio which shows the how bank make risky
investments. The more the count for Risky Invetment more risk free the bank
does. In the below screenshot ICICI has higher sharp ratio whch mean it does
less risky investment.
7. Beta - Means Volatiltity. Lower is better.Volatility is the extent to which
a fund's net asset value typically fluctuates. With all else being equal, a
highly volatile fund has more risk than one with low volatility. A fund with
high volatility can generate big returns, but it can also experience steep
losses. ICICI hs better volatility
8. Standard Deviation - Low is better. Standard deviation can show the
consistency of an investment's return over time. · A fund with a high standard
deviation shows price volatility.  SBI top the chart. DSP failed in every aspects
9.The alpha of a portfolio is the excess return it produces compared to a
benchmark index. Investors in mutual funds or ETFs often look for a fund with
a high alpha in hopes of getting a superior return on investment (ROI).
The alpha ratio is often used along with the beta coefficient. Higher is better.
ICICI win in every aspect. Next best Kotak.
 highly volatile fund has more risk than one with low volatility. A fund with
high volatility can generate big returns, but it can also experience steep
losses. ICICI hs better volatility
8. Standard Deviation - Low is better. Standard deviation can show the
consistency of an investment's return over time. · A fund with a high standard
deviation shows price volatility.  SBI top the chart. DSP failed in every aspects
9.The alpha of a portfolio is the excess return it produces compared to a
benchmark index. Investors in mutual funds or ETFs often look for a fund with
a high alpha in hopes of getting a superior return on investment (ROI).
The alpha ratio is often used along with the beta coefficient. Higher is better.
ICICI win in every aspect. Next best Kotak.

https://www.youtube.com/watch?v=G6LxpPChQnU

3 Medium Duration 1. has high credit and interest risk.

(Upto 3-4 years) 2. SBI MAGNUM Medium Duration fund give better return
3. Invest in
>> Corporate Debt
>> Goverment Securities
>> Money market instrument
4. Duration of 3 to 4 years
5. 7-9% years
6. Has Low risk
7. Has more credit default risk, coporate risk

4 Long Duration 1. Long duration for more than 7 year

2. return of 14%
3. Best company is Nippon India Nivesh lakshya Fund
4. Invested in Goverment securities - SOV
5. Low Credit risk, because it invest in Goverment bond
6. High Interest Risk
7. ICICI prudential long term bond fund - Direct Plan has 10.3 % return

5 GILT FUND 1. Medium Long duration

2. return of 10.16 by Nippon India Gilt Securities fund
3.Invested in Goverment securities - SOV
4. Invested in Goverment securities - SOV
5. Low Credit risk, because it invest in Goverment bond
 Avoid this instead choose Equity funds. They invest more in AA and A that is why
6 CREDIT RISK they are not good

7 Dynamic Bond 1. Invest in SOV, AAA, AA. Has better return upto 12%. Kotak dynaimc bond is best
among all categories. Invest in risk free companies.

FOR BEGINNER INVEST IN ULTRASHORT OR MONEY MARKET - It has low risk

st in a variety of financial instruments such as equities, debt, corporate bonds, government securities and many more. The price of these in
it is essential to identify the risk profile and invest in the most appropriate fund.

down, resulting in a loss. In simple terms, NAV is the market value of all the schemes a person has invested in per unit after negating the lia
e most appropriate fund.

1. We all would have seen that one-liner in all advertisements that mutual funds are subject to market risk.
2. Market risk is a risk which may result in losses for any investor due to the poor performance of the market.
3. There are a lot of factors that affect the market. A few examples are a natural disaster, inflation, recession, political unrest,
so on.
4.Market risk is also known as systematic risk. Diversifying a person’s portfolio won’t help in these scenarios. The only thing th
for the things to fall in place.

1. Concentration generally means focusing on just one thing. Concentrating a considerable amount of a person’s investment i
a good option.
2. Profits will be huge if lucky, but the losses will be pronounced at times. The best way to minimise this risk is by diversifying
investing heavily in one sector is also risky.
3. The more diverse the portfolio, the lesser the risk is.

1. Interest rate changes depending on the credit available with lenders and the demand from borrowers.
2. They are inversely related to each other. Increase in the interest rates during the investment period may result in a reductio
3. For example, an individual decides to invest Rs.100 with a rate of 5% for a period of x years. If the interest rate changes for
the individual will no longer be able to get back the Rs.100 he invested because the rate is fixed.
4. The only option here is reducing the market value of the bond. If the interest rate reduces to 4% on the other hand, the inv
the invested amount.

Liquidity risk refers to the difficulty to redeem an investment without incurring a loss in the value of the instrument. It can also
find a buyer for the security.

In mutual funds, like ELSS, the lock-in period may result in liquidity risk. Nothing can be done during the lock-in period. In yet an
funds (ETFs) might suffer from liquidity risk. As you may know, ETFs can be bought and sold on the stock exchanges like shares.

Sometimes due to lack of buyers in the market, you might be unable to redeem your investments when you need them the mo
have a very diverse portfolio and to select the fund diligently.
Sometimes due to lack of buyers in the market, you might be unable to redeem your investments when you need them the mo
have a very diverse portfolio and to select the fund diligently.

Credit risk means that the issuer of the scheme is unable to pay what was promised as interest. Usually, agencies which handle
agencies on these criteria. So, a person will always see that a firm with a high rating will pay less and vice-versa.

Mutual Funds, particularly debt funds, also suffer from credit risk. In debt funds, the fund manager has to incorporate only inve
sometimes it might happen that to earn higher returns, the fund manager may include lower credit-rated securities.
This would increase the credit risk of the portfolio. Before investing in a debt fund, have a look at the credit ratings of the portfo
So, right now, you are aware of the risks that are linked with mutual funds. Head to ClearTax Invest where you can invest in mut
your wealth or save taxes with us.
 

WE MUST ALWAYS CHECK I

figure show rating of compan

1. SOV are aka Sovern Bond

2. A1+ are corporate bonds
Min investment 5000
Min Bal to maintain 1000
Exit load applicable if money withdrawn before one year

Exit load applicable if money withdrawn before 3 year

Exit load applicable if money withdrawn before 7 days

any more. The price of these instruments keeps

n per unit after negating the liabilities.

market risk.
of the market.
on, recession, political unrest, fluctuation of interest rates, and

ese scenarios. The only thing that an investor can do is to wait

ount of a person’s investment in one particular scheme is never

mise this risk is by diversifying your portfolio. Concentrating and

orrowers.
period may result in a reduction of the price of securities.
f the interest rate changes for some reason and it becomes 6%,
d.
4% on the other hand, the investor can sell it at a price above

of the instrument. It can also occur when a seller is unable to

ng the lock-in period. In yet another case, exchange-traded

e stock exchanges like shares.

when you need them the most. The best way to avoid this is to
 when you need them the most. The best way to avoid this is to

Usually, agencies which handle investments are rated by  rating

and vice-versa.

er has to incorporate only investment-grade securities. But

dit-rated securities.
the credit ratings of the portfolio composition.
st where you can invest in mutual funds. You can either grow

WE MUST ALWAYS CHECK IN WHICH COMPANIES THE BANK HAS INVESTED. Below
figure show rating of companies. Higher rating means better companies and low risk.

1. SOV are aka Sovern Bond. Are goverment bond are safest place to invest
2. A1+ are corporate bonds.
BANK DEBT FUND
FUND
 FINANCIAL RATIOS
Srno Parameter in MF Short
1 Standard Deviation SD
2 S&P BSE AND SENSEX and Nifty
3 BETA
4 Alpha
5 Sharpe Ratio SR
6 PE Ratio
7 R Squared
8 Sortino Ratio
9 Expense Ratio
10 Turover Ratio

Parameter Name
1 Standard deviation is a number used to tell how measurements for a group are
spread out from the average (mean), or expected value. A low standard deviation
means that most of the numbers are very close to the average. A high standard
deviation means that the numbers are spread out. A sd. indicates hwat could be the
fund performance with its mean. E.g. If mean is 18% and sd is 12% then return comes
between 2% to 30%. When market fails the lowest returns will be 2% and if it
performing better then the highest will go upto 30%
2 Show stability of MF
3 Shows fund performance
4 Greater STand. dev. greater the volatility
Standard Deviation 5 We expect low st. dev
6 It shows the consistency of return of the fund
7 High st dev higher risk greater the volatility
8 High St. dev. higher the fluctuaion in return
9. Look for for fund with low standard deviation
https://www.youtube.com/watch?v=uDL9IT8SyR8

1. Large Cap fund invest into large cap fund. S&P BSE 20 track large cap fund.Small cap
fund invest into Small Cap funds. S&P BSE Small Cap track small cap fund.
2. Standard & Poor's (S&P) is a leading index provider and data source of independent
credit ratings. It is also the provider of the popular S&P 500 Index. S&P was founded in
1860, offering financial market intelligence.

S&P BSE AND SENSEX

 1. Today all bussiness news channel show peformance of Sensex. Whay it is nessacary?
2.During Election, new channel suggest Exit poll. Exit polls are not trustworthy because
media ask a small group of people about the party that they are voting. There are 4000
companies . It is difficult to track every company to find the performance of market.
Sensex are like Exit poll. Where a sample of small group companies are taken into
account to predict the market performance. In S&P BSE SENSEX are figured from the
direction of 30 companies while in nifty direction of 50 companies are figured. It gives a
vvery general opinion of market.They are not trustworthy as weel. But they are time
saving.
4. Free float market capitalization - It is a methodology is used to select Sensex 30 and
Nifty 50 companies and even other BSE & NSE indices.
4. How they work? Sensex has 30 companie with free float market caps. Free flaot use
Free Float market capitalization.
5. Market capital = 1 Share price x nos. of Shares
SENSEX 6 Free Float = 1 Share price x nos. of shares - share owned by comapny
7 Sensex account free float shares of top 30 comapanies.30 Companies comes from 30
different sectors which includes Bank, IT, Health...etc
8 NSE account 50 company
9 Both save time to gather the information of market. But it is still not trusthworthy.
Bcaz it includes 30 companies whose free float market capitalization is high.

1. Predict performance of a fund in correlation with an Index. Index is a bench mark.

Example the first 50 index - The first 50 best performing stock in every aspect.
2. Example - Let say a company beta is moved from 1.0 to 1.1%. What .1 implies? It
says that when a Sensex S&P BSE xxx moves by 10% the index(company) return moves
up by 11%. Similarly if it moves down by 1 percent the comapny return move down by
-11%. That mean higher beta value mean high volatility more fluctuation. It means
sensex value goes up then return are higher while return fall very low.
3. It mean higher beta value suggest
sensitivity of a particular index with relation to sensex.
Riskier the index is.
Gain high in bull market fallmore in bull market
4 Low Beta suggest that
index is less sensitive to market. More Stable
Less riskier in the market
5. Always note these parameter must not be considered indiually aor in isolation. It
must counted with other parameter to evaluate fund..
6. If fund takes higher risk than it must produced higher return. These can be validate
with alpha

Beta
Alpha
1. Lets say if fund has Beta value of 1.2
2. alpha = actual gain - gain predicted by beta value
3.Note - It is not a return produced by fund. Example fund produced return of 10% and
alpha is 3% Then it is absolutely wrong to say thatfund return is 10 + 3 that 13. The fund
has return 15%. So the alpha and beta together predict how much extra return does
fund has generated which is predicted by beta.
4. Alpha gains can be affect positively or negatively by the decision made by fund
manager while maing investment into the company. it show the quality of fund
manager how skillfull is he, to gain extra return.
5. negative alpha say that fund has underperformed.
 manager while maing investment into the company. it show the quality of fund
manager how skillfull is he, to gain extra return.
5. negative alpha say that fund has underperformed.

Sharpe Ratio
1. Risky investment gives better return with a risk. But still it is risky. To measure the risk
we can use sharpe ratio to compare MF. It measure the Risk to reward of a profile.
We can measure this risk using sharpe ratio.
2. SR is Return pre unit risk.
3. It show corelation between risk and return correlation.
4. The Sharpe Ratio can be used to Compare Portfolio
5. Sharpe ratio (SR) is important measure that evaluates the return that a fund has
generated relative to the risk taken. Risk here is measured by SD. It is used for funds
that have low correlation with benchmark index. This ratio helps an investor to know
whether it is a safe bet to invest in this fund by taking the quantum of risk. The higher
the Sharpe ratio (SR), the better a fund’s return relative to the amount of risk taken. In
other words, a mutual fund with a higher SR is better because it implies that it has
generated higher returns for every unit of risk that was taken. On the contrary, a
negative Sharpe ratio indicates that a risk-free asset would perform better than the
fund being analyzed.
6. Input required in Sharpe ratio -
a). Rp - Portfolio return
b). Rf - Risk free return rate i.e. Returns without taking any risk
Extra Return by portfolio = Rp = Rf
c) SD - Standard Deviation

Answer since both has same return but

government bond has less risk so it better
place to invest in these case

PE Ratio
1. P/E ratio is one of the most used ratios in the stock market that people use to decide
which share to buy. It shhows the quality of share that means a share give much better
earning with respect to it price.
2. Price upon Per Earning Ratio.

Share Price is P.E is earning on Share. In above example lets say in above example
Company A the price of share is 1000 and profit is 100 then pe of Company A is
1000/100 i.e. 10. Similarly company B has P.E. of 20.
If pe is more then company is expensive else if pe is less then company is cheap.
Company b has high pe is expensive.
But still it is not enough to tell which share is better.
So we need to look at past an future earning of shares.
Lets say Company A earn 80 in first year 90 in 2nd year 100 in 3rd year then its profit
growth is 10
Whereas Company B has low pe but growth of company is double the Company A
That means Company B has better growth and later its PE also become lesser

Company B is in better position. If we measure the Profit of Company A and Company

B. Company B could give better return as it PE is high.
 But still it is not enough to tell which share is better.
So we need to look at past an future earning of shares.
Lets say Company A earn 80 in first year 90 in 2nd year 100 in 3rd year then its profit
growth is 10
Whereas Company B has low pe but growth of company is double the Company A
That means Company B has better growth and later its PE also become lesser

Company B is in better position. If we measure the Profit of Company A and Company

B. Company B could give better return as it PE is high.

Let say on first year Company B has EPS(Earning per share) of 20 ,then in the next year
company would give better growth with hig PE. Company A with PE of 10 has next
year company make more profit then it pe reduce to 5 see above figure in right side
More profit company makes lesser the PE

EPS
1. EPS Stand for Earning per share
2. Share holder are part of Company. Share holder has rights on company profit. But
company do not share all its profit with Share holder. Instead company reinvest this
profit in company growth.
3. EPS - But imagine what would be profit does the share holder get if company share
the companies entire profit with share holder. EPS is profit received by share holder on
each share.

EPS = PROFIT/ TOTAL NOS OF OUTSTANDING SHARES. Profit of Company can be seen
on profit and loss statement, which is also known as PAT - Profit after Tax.

TOTAL NOS OF OUTSTANDING SHARES = MARKET CAP / CURR. SHARE PRICE

4. We can calculate EPS of website. We do not need to calculate EPS it is readily
available on Site. We need to analyse it.

Analyse With EPS

1. Higher the EPS better the comapny growth.
2. We need to compare the EPS of Company every year. We need to chak if EPS is
growing each year or not. Increase EPS year signals the profit of company is increasing
every year.
3. But EPS does not seen in isolation. We need to check other parameter as well. It just
a fundamental parameter to check the growth of coampny.
4. We must check more than 5 year of EPS to get a picture of company growth.
5. We need to understand why EPS is increasing. Which company product benefitting
the company, modification of company ...etc that causing EPS to grow.
5. Some time company take huge amount of loan to increase their EPS. If company
huge loan then it is not good thing. Then EPS would not help. We need to know the
dept of company using financial ratio.

PB Ratio
1.Price to Book value ratio is one of the most important ratios that an investor needs
to keep in mind.
2. We need to understand where to use PB ratio and where we must not used it.
3. It can lead to loss if misused
4. E.g.
PB = Share Price
Book Value
Book Value - Asset of company (owns) - Liability of company (what company gives)

if company closed then what amount that investot will get

BV per share i.e. BV / Total of Shares

https://www.youtube.com/watch?v=hPDt91OsxKE

BV says that if company of net asset value of 1 rupees and BV calculated is 4 then we
 Book Value
Book Value - Asset of company (owns) - Liability of company (what company gives)
if company closed then what amount that investot will get

BV per share i.e. BV / Total of Shares

https://www.youtube.com/watch?v=hPDt91OsxKE

BV says that if company of net asset value of 1 rupees and BV calculated is 4 then we
are paying 4 rupees for company with asset of 1 rupee. Ofr 1 rupee asset we are
paying 4 rupees

Let say if company shares cost is 20 rupees that if the compny BV is 5 rupees then we
will 5 rupees if company get close not 20 rupees. 5 Rupees is the actual value of
company

EXPENSE RATIO 1. Expense ratios indicate how much the fund charges in terms of percentage annually
to manage your investment portfolio. If you invest Rs. 20,000 in a fund which has
an expense ratio of 2%, then it means that you need to pay Rs. 400 to the fund house
to manage your money.
2. A good expense ratio, from the investor's viewpoint, is around 0.5% to 0.75% for an
actively managed portfolio. An expense ratio greater than 1.5% is considered high.
The expense ratio for mutual funds is typically higher than expense ratios for
ETFs(Exchange traded fund). This is because ETFs are passively managed.
3. Basically it is a Fee charged by Mutual FFund's Fund manager to manage investot
money. The fees consist of

NAV
1. Net Asset Value - Net asset value (NAV) represents a fund’s per unit market value.
This is the price at which investors buy fund units from a fund company or sell it back
to the fund house. It caluclate the single share value in Mutual fund.
2. More the value of NAV more the value of mutual fund.
3.

R Squared 1. Show corelation between benchmark and Average return of Fund

2. Range of RSquare is between 0 to 100
The more the better
100 means Benchmark and average return are same
3. 0 value means no correlation of return made by fund to its benchmark. 100 means
avg retun by fund matches the benchmark

3. In investing, a high R-squared, between 85% and 100%, indicates the stock or

fund's performance moves relatively in line with the index. A fund with a low R-
squared, at 70% or less, indicates the security does not generally follow the
movements of the index.
 2. Range of RSquare is between 0 to 100
The more the better
100 means Benchmark and average return are same
3. 0 value means no correlation of return made by fund to its benchmark. 100 means
avg retun by fund matches the benchmark

3. In investing, a high R-squared, between 85% and 100%, indicates the stock or

fund's performance moves relatively in line with the index. A fund with a low R-
squared, at 70% or less, indicates the security does not generally follow the
movements of the index.

Sorino Ratio 1. Sharpe Ratio and Sortino ratio are nearly same. But in Sortino ratio we
considered negative standard ratio.
2. Risk is of two type - Good Risk and Bad Risk. It shows that what would that return
if the fund is not performing well, How much return does the fund is generating in
bad times.
3. Good Risk give +ve return, whereas bad risk give -ve return
4. Sharpe ratio - doesn't considered bad risk neither good risk
5. Sortino only considered bad risk
6. Lesser the Downside deviation(-ve standard ratio) more the sortino ratio. High
sortino ratio is better.

Turnover ratio 1. Inventory - Company Product or raw material that company going to sell
2.High Inventory Turnover ratio indicates that company sell their product faster
than company with lower TR
But still it is does not be looked at isolcation
3. Fund never perform constant it changes every time. Turnover ratio indicate the
changes in performance of the fund.
4. Formula

AUM 1. AUM - Asset under Management.

2. AUM or Assets Under Management refers to the total market value of the
assets that are being managed by the mutual fund. Simply put, assets under
management or fund size are the overall value of the capital held by the mutual
fund in the current market.
3. Total Mutual Amount collected by bank that manages a company asset.
4. More AUM better management of fund. But it is not so important.
 1. AUM - Asset under Management.
2. AUM or Assets Under Management refers to the total market value of the
assets that are being managed by the mutual fund. Simply put, assets under
management or fund size are the overall value of the capital held by the mutual
fund in the current market.
3. Total Mutual Amount collected by bank that manages a company asset.
4. More AUM better management of fund. But it is not so important.

AMC, NFO, AUM, MORE 1. AMC - Assest management company. Who bring fund for company? AMC e.g.
HDFC, ICICI, Kotak, Aditya Birla…etc.
2. NFO - New Fund Offer. AMC bring NFO for company
3. NFO has a unit whose minimum price is 10 rupees it can be any amount but
min is 10 rupee. Let say NFO has collected 50 lac rupees from investor mutually
for a fund. I.e. company A has 50 lac Rupees. These amount is known as AUM
(Asset Under Management).
4. If per unit cost 10 Rupee. Then total unit of company would be 50 lac / 10
which 5 lac unit.
5. Then these 10 Rupees is knowned as NAV(Net Asset Value)
6. Let suppose valuation of comapny increased to 60 lac but nos. of unit sold i.e. 5
lac remain the same. Then NAV would be 60 lac / 5 lac = 12. So 12 is NAV
7. AUM can increased due to loan, more investor, profit...etc.
8. If a investor purchased 5000 unit with NAV of 10 then only NAV amount will be
changed, the nos of unit will not change

Direct Plan vs Regular Regular plans are those mutual fund plans that are bought through an
Plan intermediary. These intermediaries can be brokers, advisors, or distributors. The
intermediaries charge the fund house a certain fee for selling their mutual funds.
The AMCs usually recover this fee through expense ratio. The expense ratio for
regular mutual funds is slightly higher than direct mutual funds. Hence the
returns tend to be a little higher for direct plans. A regular plan best suits
investors who do not have the knowledge about the market nor the time to
monitor their portfolio. Therefore, a regular plan is far more convenient for
investors who aren’t well informed about the market. They receive expert advice
at a nominal fee.

SIP VS LUMP SUM

GROWTH VS DIVIDEND
or a group are 1.The figure show standard dev. of DSP BR M
dard deviation Cap fund, who mean value is 22.55 which is a
gh standard average return in let say 10 year. more +16 re
wat could be the and even less than -16 return is possible by th
then return comes 2. Debt fund has low standard dev.
% and if it 3. High standard deviation in equity category
given more deviation which is not alway bad.
need to check the performace stablity.
4. Standard deviation can be 0 for stable
performance

cap fund.Small cap

fund.
rce of independent
S&P was founded in
Whay it is nessacary? Free Float -
rustworthy because 1. Nifty has to 50 companies. Sens
ting. There are 4000 companies are selected. So It dep
mance of market. capitializaation.
are taken into 2. There are categories of Index lik
figured from the Companies, Bank Index which con
are figured. It gives a there are health care Index, Small
But they are time 3. Early it was depend on Full mar
4. Market capitalization show the
elect Sensex 30 and Formula - Market Capital = Share
5. Compies indiviually make availa
caps. Free flaot use can offer 100% shares but most co
6. 20% shares are owned by Trade
of companies.
pny 7. 20% shares are accounted for T
nies comes from 30 market capitalization.
8. Free Foat capitalization - marke
for trading
not trusthworthy.
on is high.

x is a bench mark.
ery aspect. If beta is 1.2 then if market goes u
hat .1 implies? It 10% the return will be 12% else if
pany) return moves goes down to -10% the return go
turn move down by to -12%
uation. It means
ow.

or in isolation. It

ese can be validate

d return of 10% and

+ 3 that 13. The fund
extra return does

made by fund
ality of fund
ality of fund

. To measure the risk

ard of a profile.

that a fund has

is used for funds Return generated per unit of risk taken
investor to know
of risk. The higher
unt of risk taken. In
plies that it has
he contrary, a
better than the

E.G.

Answer government bond has less return of and palmgor gives only 3%
more return with a risk, It can be assess using other parameter

people use to decide 6. The Basic funda of Investment is to Buy Low and Sell high. That is to buy Share Sometime it pe ratio
re give much better at low price and sell it to higher price. So that mean buy a stock when it is bcaz the company off
undervalued and sell it when it overvalued, this will gain you profit. or low. It does not me
7. Question arises whether how do we know if company is Undervalued or ratio also
Overvalued. The PE ration can help. Conslusion
8. PE stand for Price per Earnnings - Price refers to Current Market Price of the
Share, Earning Refers to Earning per share or profit generated by per shares. But if company has h
9. Let take an example of Company ABC Corp that has a net profit of 10 Lakh of lower PE doesn't nec
net profit per year. The Company is listed on Share market with share price of 100 buy a stock just bcaz
Rupee. And there are total of 2 lakh shares.
Do not look for cheap
Let Calulate PE for Company
Don't analyze PE in Is
1st we need to Earning per share for the company
14. TYpes of PE
bove example E = 10 lakh / 2lakh = 5 > Forward per ratio
ompany A is PE = Price of Share / Earning = 100 / 5 = 20 > Trailing per ratio

pany is cheap. 10. We can easily find PE ratio of any company of internet. Let say zeroda 15 Forward per ratio
11. In above example ABC Corp company has a market value of
Market Value = profit of company * nos. of share = 10 lac * 2 lac = 2 crore Future extimation
12. Some company has higher PE, shares give more earning, because Investor has
ear then its profit higher expectation on that company. Company has big responsibility to earning 16 Trailing per ratio
more and more profit. Total earning over th
the Company A 13. What is Typical or best value of PE? estimation about futu
ome lesser PE value can be range from 1 to 1000. It becomes difficult to identify if comapny f
overvalued or under valued.
ny A and Company
We can find out the benchmark of PE industry wise, such as IT, Automobile...etc.
Let say IT has PE of 25. Above 25 means over values below 25 means under valued
 Market Value = profit of company * nos. of share = 10 lac * 2 lac = 2 crore Future extimation
12. Some company has higher PE, shares give more earning, because Investor has
ear then its profit higher expectation on that company. Company has big responsibility to earning 16 Trailing per ratio
more and more profit. Total earning over th
the Company A 13. What is Typical or best value of PE? estimation about futu
ome lesser PE value can be range from 1 to 1000. It becomes difficult to identify if comapny f
overvalued or under valued.
ny A and Company
We can find out the benchmark of PE industry wise, such as IT, Automobile...etc.
Let say IT has PE of 25. Above 25 means over values below 25 means under valued
hen in the next year
E of 10 has next But still it does not give you clear picture to compare comapnies.
gure in right side know as PB ratio

EPS of CDSL Company

mpany profit. But
any reinvest this

t if company share
d by share holder on

pany can be seen

er Tax.

RE PRICE
S it is readily

o chak if EPS is
mpany is increasing

meter as well. It just

any growth.
product benefitting
ow.
EPS. If company
need to know the

an investor needs We cannot apply these BV in all company. Like IT company where
compamy hire employee which are not asset of company they are expense
st not used it. of company.
But these company has less asset and BV will be less
These company is not eligible for BV

Some company is a brand or it has soem regulatoruy benefit. We need to

company gives) check how company profit comes from i.e asset or expense i.e. employee

lated is 4 then we
 Some company is a brand or it has soem regulatoruy benefit. We need to
company gives) check how company profit comes from i.e asset or expense i.e. employee

lated is 4 then we
e asset we are

s 5 rupees then we
ctual value of

percentage annually
und which has
to the fund house
5% to 0.75% for an
onsidered high.
ratios for
naged.
manage investot

unit market value.

pany or sell it back
d.

d It predict return on the basis of beta value. It describe the relation

betwenn fund and benhmark index.
RSquared also display the relaibility of Beta value
According to thumbnail RSquared value greater than 0.8 shows that
hmark. 100 means beta value is more reliable.

s the stock or
with a low R-
ollow the
 betwenn fund and benhmark index.
RSquared also display the relaibility of Beta value
According to thumbnail RSquared value greater than 0.8 shows that
hmark. 100 means beta value is more reliable.

s the stock or
with a low R-
ollow the

tio we

would that return

is generating in

no ratio. High

g to sell
oduct faster

tio indicate the

lue of the
ets under
y the mutual

y asset.
nt.
lue of the
ets under
y the mutual
y asset.
nt.

ny? AMC e.g.

amount but
tor mutually
wn as AUM

0 lac / 10

unit sold i.e. 5

s NAV

amount will be

an
ributors. The
mutual funds.
nse ratio for
nce the
t suits
e time to
nient for
expert advice
standard dev. of DSP BR Micro
an value is 22.55 which is an
et say 10 year. more +16 return
-16 return is possible by this mf
w standard dev.
eviation in equity category
on which is not alway bad. we
performace stablity.
tion can be 0 for stable

EXAMPLE
 at -
has to 50 companies. Sensex has top 30 companies. How these
nies are selected. So It depends on free float market
zaation.
e are categories of Index like Auto Index whihch consisit of Auto
nies, Bank Index which consist of Banking companies, Simlarly
e health care Index, Small cap index, mid cap index. Locked In Share - An investor is "locked in" when he or
it was depend on Full market capitilization. trade a security because regulations, taxes or penalties
et capitalization show the value of Company. warrants offered under employee incentive programs,
ula - Market Capital = Share prices x Nos. of Shares Issued mandatory vesting period, can all become locked in.
pies indiviually make available 20% of shares for trading.They Smaller free float means - Graph will show more fluctu
r 100% shares but most companies bring 20% of shares to bear. fluctuation
shares are owned by Trader. Rest is owned by Promoter, owner
panies.
shares are accounted for Trading which is taken for free float
capitalization.
Foat capitalization - market value of Shares tahat are available
ing

is 1.2 then if market goes up to

e return will be 12% else if return
own to -10% the return goes down
%

Alpha = Actual Return - Return Predicted by Beta

It indicate Fund manager performance.
 Sharpe Ratio of Portfolio 1 = 0.5
Sharpe Ratio of Portfolio 2 = 0.3

Portfolio 1 gives more reward for per unit risk taken. Porfolio 1 has
better SR

Let say I have two portpo

portfolio is better

Sometime it pe ratio is not taken into consideration to compare portfolios,

bcaz the company offering a high profit, it is possible that their pe value is high
or low. It does not mean high pe or low pe is bad. We can look at Price to Book
ratio also
Conslusion

But if company has high PE then mre likely the comapny is overvalues, whicle
lower PE doesn't necessarily means undervalued. So we shuld considered to
buy a stock just bcaz PE is low.
Do not look for cheap Stock look for great stock at bargain price

Don't analyze PE in Isolation

14. TYpes of PE
> Forward per ratio
> Trailing per ratio

15 Forward per ratio

Future extimation

16 Trailing per ratio

Total earning over the past 12 month. Note that past figure does not show any
estimation about future.
Future extimation

16 Trailing per ratio

Total earning over the past 12 month. Note that past figure does not show any
estimation about future.

More accurate EPS

Example
 Performance of Sensex in 07/02/2020 is in Positive

List of 30 Companies
of BSE => Goto
BSE.com
r is "locked in" when he or she is unwilling or unable to
ulations, taxes or penalties prevent it. Stocks, options and
oyee incentive programs, which usually come with a
an all become locked in.
raph will show more fluctuation. HIgh Free float means less
 Calculate Risk Free Rate -
1. The risk-free rate represents the int
free investment over a specified perio
the current inflation rate from the yie
2. Risk is the possibility that an actual
3. Risk free rate is the certainity that a
4.

5. It is used as a bench mark it show le

6. This rate can be compared with rate
free.

Let say I have two portpolio with 1.25 and 1.10. Since higher is better. So 1.25
portfolio is better
e
 Screenshot of Free Flaot Maket
capilization show in HDFC Bank ltd.
Company only 25% of share are hold by
promoters. 75 is available for trading,
That is why its market capital percent is
high. On the other hand TCS company
promoter hold 71 percent of share. That is
why becoming a biggest company the % is
small
 sk Free Rate -
ree rate represents the interest an investor would expect from an absolutely risk-
ment over a specified period of time. The real risk-free rate can be calculated by subtracting
inflation rate from the yield of the Treasury bond matching your investment duration.
e possibility that an actual outcome may differ from the expected outcome
rate is the certainity that an actual outcome must not differ from the expected outcome.

as a bench mark it show least risky investment anywhere

can be compared with rates of return for other investment opportunities which are not risk
Sensex only include top 30 companies. If Investor think to buy the shares of
these companies then their value will on higher side. You will end up buying
shares at a very higher cost. You can check the average cost of company with
standard deviation. Average cost could be the right cost of company.
AXIS HAS PERFORMED BETTER IN EQUITY FUND

https://www.youtube.com/watch?v=ppvICjnFnrY

AXIS IS performing consistently well

AXIS BANK HOLD STOCK FOR LONG DURATION

AXIS INVESTMENT GOOD COMPANIES

LOWER DEBT TO EQUITY RATIO BETTER RETURN YOU WILL GET

HDFC INDEX SENSEX FUND

THESE COMPANIES HAS BETTER GROWTH
>> SEBI says Fund manager of MF company cannot investment more than 1
customer money to any company. These restriction is not applicable for Inde
 investment more than 10% of
is not applicable for Index Fund.
 SIP - SYSTEMATIC INVESTMENT PLAN

There are two way to invetment in Mutual Fund -

>> Invest in Direct plan
>> Invest in Mutual Fund
>> Invest in Lumpsum invest

SIP VS LUMPSUM RETURNS IN 12 years

>> SIP has average return of 10 to 11

>> Lumpsum return are not fixed, they give more
return than SIP. Lumpsum require knowledge of
market.
>> SIP hs less risk. SIP is good for beginners