Security Analysis and

Investment Management

Presented by :- Jenny Shah

Guided by :- Hardik Sir
Department of Business Administration
Contents :-

▪ Mutual Fund
▪ Types of Mutual Fund
▪ Calculation of NAV
▪ Examples
▪ References
 MUTUAL FUND :-

▪ A mutual fund is a professionally managed investment

product in which a pool of money from a group of
investors is invested across assets such as equities, bonds,
etc. Professionals handle the investments on behalf of the
investors who gain enhanced earnings based on their risk
appetite.
 TYPES OF MUTUAL FUNDS :-

▪ BASED ON ASSET CLASS :-

Equity funds

Debt funds

Hybrid funds

Multi Asset

Others ( physical )
Multi Asset Include :-
▪ Based on Investment Goals
Growth Funds
Income Funds

Liquid Funds

Tax-Saving Funds
Aggressive Growth Funds

Capital Protection Funds

Fixed Maturity Funds

Pension Funds
Cont…

▪ Based on Structure
Open-Ended Funds

Closed-Ended Funds

Interval Funds
Cont…

▪ Based on Risk
Very Low-Risk Funds

Low-Risk Funds

Medium-risk Funds

High-Risk Funds
Specialised Mutual Fund :-
Sector Funds
Index Funds
Funds of Funds
Emerging market Funds
International/ Foreign Funds
Global Funds
Real Estate Funds
Commodity-focused Stock Funds
Market Neutral Funds
Inverse/Leveraged Funds
Asset Allocation Funds
Gilt Funds
 Net Asset Value (NAV) :-

▪ Mutual fund net asset value (NAV) represents a fund's per share 

market value. It is the price at which investors buy (bid price) fund
shares from a fund company and sell them (redemption price) to a
fund company.

▪ A fund's NAV is calculated by dividing the total value of all the cash
and securities in a fund's portfolio, less any liabilities, by the number
of shares outstanding.
 Understanding Mutual Fund NAV

A NAV computation is undertaken once at the end of each

trading day based on the closing market prices of the
portfolio's securities. The formula for a mutual fund's NAV
calculation is straightforward:

NAV = (Assets - Liabilities) / Total number of outstanding shares

Example :-

▪ let's say a mutual fund has $45 million invested in securities

and $5 million in cash for total assets of $50 million. The

fund has liabilities of $10 million. As a result, the fund

would have a total value of $40 million.

Solution :-

▪ The total value figure is important to investors

because it is from here that the price per unit of a
fund can be calculated. By dividing the total value of
a fund by the number of outstanding units, you are
left with the price per unit—the form of
measurement in which NAV is usually quoted.
Solution :-

▪  if the fund had 4 million shares outstanding, the price-per-

share value would be $40 million divided by 4 million,

which equals a NAV of $10 per share.

Example 2 :-

▪ Assume that a mutual fund has $100 million worth of total investments in different
securities, which is calculated based on the day's closing prices for each asset.

▪ It also has $7 million of cash and cash equivalents on hand, as well as $4 million in
total receivables. Accrued income for the day is $75,000. The fund has $13 million
in short-term liabilities and $2 million in long-term liabilities.

▪ Accrued expenses for the day are $10,000. The fund has 5 million shares
outstanding.
 Solution :-

The NAV is calculated as:

NAV = [($100,000,000 + $7,000,000 + $4,000,000 + $75,000) -

($13,000,000 + $2,000,000 + $10,000)] / 5,000,000

= ($111,075,000 - $15,010,000) / 5,000,000

= $19.21

For the given day, the mutual fund shares will be traded at $19.21 per share.
 REFERENCES :-

▪ Mutual Funds - Meaning, Examples, Types & Advantages (wallstreet

mojo.com)
▪ What Is A Mutual Fund (utimf.com)
▪ Different Types Of Mutual Fund (With Classification & Objective) (or
owealth.com)
▪ Types of Mutual Funds - 12 Mutual Fund Types Based on Asset Class,
Structure & Risk (cleartax.in)
▪ Net Asset Value (NAV): Definition, Formula, Example, and Uses (inve
stopedia.com)