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
Is it investing in developed countries/developing countries/underdeveloped countries?
Historical Market uncertainties in the countries it’s investing.
Are the countries terror-prone?
Future prospects of the countries.
Calculation:
It’s calculated based on the issuer country of the securities a fund is investing in. Let’s say an AUM of a mutual fund is Rs 100 cr. And it invested 20 Cr in the securities of company ABC and 10 Cr in company DEF which belong to India and also invested 40 Cr in ZZZ company and 20Cr in YYY company which belong to the U.K and it holds 10Cr cash to meet redemption requests.
Then the country breakdown of the mutual fund would become
U.K 60%
India 30%
Cash 10%
Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
Related posts:
Loading ...