A) Introduction to Asset Management Companies
Definition: -
Under SEBI Regulations, every mutual fund is required to have an Asset Management Company (AMC)
incorporated in accordance with the Companies Act, 2013 to manage the funds of the mutual fund. The
AMC should be approved by SEBI and should enter into an agreement with the trustees of the mutual
fund to formulate schemes, raise money against units, invest the funds in accrued securities and after
meeting the permissible costs as per norms, distribute income to the share holders of the funds
Eligibility:-
1) The asset management company should have directors having adequate professional experience in
finance and financial services related field
2) They should not be found
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5) The chairman of the asset management company should not be a trustee of any mutual fund. Finally,
the asset management company should have a net worth of not less than rupees ten crores.
6) AMC Responsible for the Acts of its Employees
Obligations for an AMC: -
1) The asset management company should take all reasonable steps and exercise due diligence to
ensure that the investment of funds pertaining to any scheme is not contrary to the provisions of these
regulations and the trust deed.
2) It should treat the money as if it were its own business and to this effect apply due diligence and
other measures necessary.
3) The asset management company shall be held liable for the wrong commissions or omissions
4) It is required to submit to the trustees, quarterly reports of each year on its activities and the
compliance with these regulations. It should file with the trustees, the details of transactions in
securities by the key personnel of the asset management company in their own name or on behalf
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This can show clients how
the current deficiencies in the portfolio can lead upto giving more benefits, and how current market
trends may be used to inform new investing decisions. The plans of the asset manager goes around his
own research and records along with the goals of the investor.
Pooled in resources pose the unique advantage that individual asset management firms cannot, that is
of the investing opportunities in varied products. Amalgamation of resources results in greater
investment capital, preferential rates and purchasing options can be given to investors who otherwise
wouldn’t have been entertained. Investors receive returns on the basis of their investments in the
general fund. There are two sides to this type of fund as on the one hand this results in increased
performance of average investors; however the seasoned investors do not get complete freedom to get
the stocks that they want
Once an investment plan is devised and set into motion, asset management companies then monitor
the strategy and keep the clientele updated with the earnings and trends. Thus the customer gets a
This memorandum shall provide an in depth analysis of Target Corporation’s performance for the most current for the year 2014. To obtain a better understanding of Target Corporation’s performance the following categories shall be addressed: Preliminary analytical procedures, Accounting policy efficiency and reliability, Evaluation of Disclosure Controls, Evaluating Company’s technology system and its Risks, Substantive Procedures, Payout ratio in the Target Corporation financials, Fraud Considerations and Extended Procedures.
...l. If a transaction is missing or the cash on hand is not adding up management should be notified.
ensure the protection of the Company's legitimate business interests, including corporate opportunities, assets and confidential information; and
* Manage the purchase of equipment and ensure all appropriate accounts are funded, obligated and adjustments processed
Eric Dinallo: Ensure any financial institution has the necessary capital to support its financial commitments.
Talking specifically, executives of AssetOne could not make decision on critical things quickly since AssetOne was too formalized. Thus, AssetOne is too centralized. For example, acquired firm did not perform well after acquisition due to centralization. Previously, TaurusBank was giving investment fund division freedom to launch new products without approval of executive team, which was not found in AssetOne’s culture.
The advantages of retaining internal control on endowment allocation across asset classes and managers are the assets manage by internal managers. Because of it, the decision making between Kings College bursar and investment committee regarding the endowment performance is efficient. Moreover, Kings College has no relationship and no administrative burden to take care of. Finally, passive investment in equity index funds fit with the risk preferences of investment committee. The long-run objectives were to achieve total return of 3.35% with the least possible risk.
Furthermore, the new entity had a solid capital structure with 40% equity and also 43.3% subordinated debt
Ross, S.A., Westerfield, R.W., Jaffe, J. and Jordan, B.D., 2008. Modern Financial Management: International Student Edition. 8th Edition. New York: McGraw-Hill Companies.
The following essay will expand on the usefulness and flaws of CAPM and other asset evaluation frameworks and in the end showing that despite all the evidence against CAPM it is still a useful model for determining asset investments.
According to Investopedia (Asset Allocation Definition, 2013), asset allocation is an investment strategy that aims to balance risk and reward by distributing a portfolio’s assets according to an individual’s goals, risk tolerance and investment horizon. There are three main asset classes: equities, fixed-income, cash and cash equivalents; but they all have different levels of risk and return. A prudent investor should be careful in allocating each asset class to his portfolio. Proper asset allocation is a highly debatable subject and is not designed equally for everybody, but is rather based on the desires and needs of the individual investor. This paper discusses the importance of asset allocation, the differences and the proper diversification within the portfolio.
Company policy requires the cash to be received before or after rendering a service. Due to some business reasons, the management has been extending credit to clients contrary to the guidelines.
(6)In order to ensure safety of company property, the company bank account should be monitored by someone out of the account payable department. However, in this system, there is no such person who could reconcile the account. As a result, it is difficult to measure whether the payment is equal to the value of purchased good. On top of that, treasurers and account payable clerks can hardly be controlled. The owner of this business is recommended to find some trusted and reliable accountants as supervisors of the company bank account. And the company should also design a system which requires the authorised fingerprint for each payment. This can maximize the protection of the company's property.
Our understanding and the concept of investment in behavioural finance combines economics and psychology to analyse how and why investors make final decision. As an investor one’s decision to invest is fully influence by different type of attitudes of behavioural and psychological ( Ricciardi & Simon, 2000). Yet, in order to maximize their financial goal, investors must have a good investment planning. Furthermore , to gain a good investment planning , there must be a good decision making among investors. They have to choose the right investment plan I order to manage the resources for different type of investments not only to gain profit wise but also to avoid the risk that occur from investment.
The Modern portfolio theory {MPT}, "proposes how rational investors will use diversification to optimize their portfolios, and how an asset should be priced given its risk relative to the market as a whole. The basic concepts of the theory are the efficient frontier, Capital Asset Pricing Model and beta coefficient, the Capital Market Line and the Securities Market Line. MPT models the return of an asset as a random variable and a portfolio as a weighted combination of assets; the return of a portfolio is thus also a random variable and consequently has an expected value and a variance.