Mutual Funds – Market Cap Breakdown

Market cap breakdown is applicable for equity funds. It gives information about the market capitalization range of the shares the fund is investing in. In general large cap companies’ shares are considered to be less risky compared to medium and small cap companies. So this breakdown information is also a decisive factor while choosing a scheme.

Market capitalization of a fund is usually given in one of the below 2 bucket formats.

BIllion Buckets

Calculation

Let’s say an AUM of a mutual fund is Rs 100 cr. And it invested this amount as given below Read more

January 9, 2010 | Filed Under Mutual Funds | Leave a Comment

Mutual Funds – Credit Rating Breakdown

Credit Rating breakdown is applicable for bond/fixed income funds. It gives an idea of what quality of bonds a fund is investing in. That in turn gives a measure of risk reward ratio when compared with the fund’s performance.

Credit rating of a security is the credit worthiness of the issuer i.e. the rating is given based on the issuer’s ability to repay the principle and timely payment of coupons. Moody and S&P are famous international standard credit rating agencies.

The credit rating breakdown of a fund can be any single agency specific rating or a combination of the ratings given to the securities which the fund is investing in by different agencies. Read more

January 3, 2010 | Filed Under Mutual Funds | Leave a Comment

Mutual Funds – Asset Allocation Breakdown

Asset Allocation breakdown of a mutual fund is the distribution of investments across different asset classes. Asset classes vary from company to company but they can be compared across different providers. An asset class in simple terms is a combination type of securities a fund invests in and the region of the security.

Examples:

Indian Equities
UK Gilts
European Treasury
North American Equities etc Read more

January 3, 2010 | Filed Under Mutual Funds | Leave a Comment

Mutual Funds – Sector/industry Breakdown

Sector/industry breakdown of a mutual fund shows its investments across different sectors like banks, technology, healthcare etc. This gives an idea to an investor/prospective investor on the strategy of the fund. If you can pick current booming sectors and matured sectors then you can evaluate the amount of risk the fund is taking and what level of profits it’s aiming for.

Calculation

Let’s say an AUM of a mutual fund is Rs 100 cr. And it invested 20 Cr in the securities of a banking company ABC and 10 Cr in Telecom Company DEF and 20 Cr in one more Telecom company XYZ and also invested 20 Cr in ZZZ company and 20Cr in YYY company which are in healthcare domain and it holds 10Cr cash to meet redemption requests. Read more

January 1, 2010 | Filed Under Mutual Funds | Leave a Comment

Mutual Funds - Country Breakdown

I wish you a wonderful new year to all readers.

Country breakdown of a mutual fund shows the breakdown of its investments across different countries. For country specific funds it doesn’t make much significance as 100% of its investments are done in a single country. But for region specific and global funds it adds a value. An investor looking at the breakdown information can make out (to a certain level) the risks associated with the investments by comparing with the country specific risks.

The factors to be considered are Read more

January 1, 2010 | Filed Under Mutual Funds | Leave a Comment

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