CHP - 6

Mutual Funds

CHAPTER DESIGN

1. INTRODUCTION
2. BASICS OF MUTUAL FUNDS
3. CLASSIFICATION OF MUTUAL FUNDS
4. ADVANTAGES OF MUTUAL FUNDS
5. DISADVANTAGES OF MUTUAL FUNDS
6. NET ASSET VALUE
7. HOLDING PERIOD YIELD
1. INTRODUCTION :
Mutual Fund is a trust that pools together the resources of investors to make a foray into
investments in the capital market thereby making the investor to be a part owner of the assets of
the mutual fund. The fund is managed by a professional money manager who invests the money
collected from different investors in various stocks, bonds or other securities according to specific
investment objectives as established by the fund. If the value of the mutual fund investments
goes up, the return on them increases and vice versa.

2. BASICS ON MUTUAL FUNDS :

Mutual Benefits :
Investing in mutual funds is an expert’s job in the present market scenario. A systematic
investment in this instrument is bound to give rich dividends in the long-term. That is why over 2
crore investors have faith in mutual funds.

What is a Mutual Fund?

A mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. A mutual fund is the most suitable investment for the cautious investor as it offers
an opportunity to invest in a diversified professionally managed basket of securities at a relatively
low cost.

Who can invest in Mutual Funds?

Anybody with an investible surplus of as little as a few thousand rupees can invest in mutual funds
by buying units of a particular mutual fund scheme that has a defined investment objective and
strategy.

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How Mutual Funds work for you ?
The money collected from the investors is invested by a fund manager in different types of
securities. These could range from shares and debentures to money market instruments
depending upon the scheme’s stated objectives. The income earned through these investments
and capital appreciation realized by the scheme is shared by its unit holders in proportion to the
units owned by them. (please refer the diagram above)

Should we invest in Stocks or Mutual Funds? –

Yes (Subject to Risk appetite)

3. CLASSIFICATION OF MUTUAL FUNDS :

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4. ADVANTAGES OF MUTUAL FUNDS :
(a) Professional Management : The funds are managed by skilled and professionally
experienced managers with a back up of a Research team.
(b) Diversification : Mutual Funds offer diversification in portfolio which reduces the risk.
(c) Convenient Administration : There are no administrative risks of share transfer, as many
of the Mutual Funds offer services in a demat form which save investor’s time and delay.
(d) Higher Returns : Over a medium to long-term investment, investors always get higher
returns in Mutual Funds as compared to other avenues of investment. This is already seen
from excellent returns, Mutual Funds have provided in the last few years. However,
investors are cautioned that such high returns riding on the IT boom should not be taken
as regular returns and therefore one should look at the average returns provided by the
Mutual Funds particularly in the equity schemes during the last couple of years.
(e) Low Cost of Management : No Mutual Fund can increase the cost beyond prescribed limits
of 2.5% maximum and any extra cost of management is to be borne by the AMC.
(f) Liquidity : In all the open ended funds, liquidity is provided by direct sales / repurchase by
the Mutual Fund and in case of close ended funds, the liquidity is provided by listing the
units on the Stock Exchange.
(g) Transparency : The SEBI Regulations now compel all the Mutual Funds to disclose their
portfolios on a half-yearly basis. However, many Mutual Funds disclose this on a quarterly
or monthly basis to their investors. The NAVs are calculated on a daily basis in case of open
ended funds and are now published through AMFI in the newspapers.
(h) Other Benefits : Mutual Funds provide regular withdrawal and systematic investment
plans according to the need of the investors. The investors can also switch from one
scheme to another without any load.
(i) Highly Regulated : Mutual Funds all over the world are highly regulated and in India all
Mutual Funds are registered with SEBI and are strictly regulated as per the Mutual Fund
Regulations which provide excellent investor protection.
(j) Economies of scale : The way mutual funds are structured gives it a natural advantage. The
“pooled” money from a number of investors ensures that mutual funds enjoy economies
of scale; it is cheaper compared to investing directly in the capital markets which involves
higher charges. This also allows retail investors access to high entry level markets like real
estate, and also there is a greater control over costs.
(k) Flexibility : There are a lot of features in a regular mutual fund scheme, which imparts
flexibility to the scheme. An investor can opt for Systematic Investment Plan (SIP),
Systematic Withdrawal Plan etc. to plan his cash flow requirements as per his convenience.
The wide range of schemes being launched in India by different mutual funds also provides
an added flexibility to the investor to plan his portfolio accordingly.

5. DISADVANTAGES OF MUTUAL FUNDS :

(a) No guarantee of Return : There are three issues involved:
(i) All Mutual Funds cannot be winners. There may be some who may underperform
the benchmark index i.e. it may not even perform well as a novice who invests in
the stocks constituting the index.
(ii) A mutual fund may perform better than the stock market but this does not
necessarily lead to a gain for the investor. The market may have risen and the

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 mutual fund scheme increased in value but the investor would have got the same
increase had he invested in risk free investments than in mutual fund.
(iii) Investors may forgive if the return is not adequate. But they will not do so if the
principal is eroded. Mutual Fund investment may depreciate in value.
(b) Diversification : A mutual fund helps to create a diversified portfolio. Though
diversification minimizes risk, it does not ensure maximizing returns. The returns that
mutual funds offer are less than what an investor can achieve. For example, if a single
security held by a mutual fund doubles in value, the mutual fund itself would not double
in value because that security is only one small part of the fund's holdings. By holding a
large number of different investments, mutual funds tend to do neither exceptionally well
nor exceptionally poor.
(c) Selection of Proper Fund : It may be easier to select the right share rather than the right
fund. For stocks, one can base his selection on the parameters of economic, industry and
company analysis. In case of mutual funds, past performance is the only criteria to fall back
upon. But past cannot predict the future.
(d) Cost Factor : Mutual Funds carry a price tag. Fund Managers are the highest paid
executives. While investing, one has to pay for entry load and when leaving he has to pay
for exit load. Such costs reduce the return from mutual fund. The fees paid to the Asset
Management Company is in no way related to performance.
(e) Unethical Practices : Mutual Funds may not play a fair game. Each scheme may sell some
of the holdings to its sister concerns for substantive notional gains and posting NAVs in a
formalized manner.
(f) Taxes : When making decisions about your money, fund managers do not consider your
personal tax situations. For example when a fund manager sells a security, a capital gain
tax is triggered, which affects how profitable the individual is from sale. It might have been
more profitable for the individual to defer the capital gain liability.
(g) Transfer Difficulties : Complications arise with mutual funds when a managed portfolio is
switched to a different financial firm. Sometimes the mutual fund positions have to be
closed out before a transfer can happen. This can be a major problem for investors.
Liquidating a mutual fund portfolio may increase risk, increase fees and commissions, and
create capital gains taxes.

6. NET ASSET VALUE :

It is the amount which a unit holder would receive if the mutual fund were wound up. An investor
in mutual fund is a part owner of all its assets and liabilities. It is value of net assets of the funds.

𝑁𝑒𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
It can be calculated by using the following formula =
𝑁𝑜 𝑜𝑓 𝑈𝑛𝑖𝑡𝑠 𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔

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Question 1 :
Consider the following data of a mutual fund scheme :
Particulars Rs. In crore
Value of investments 2,056.25
Receivables 158.25
Accrued in come 25.75
Other current assets 325.26
Liabilities 449.56
Accrued expenses 52.92
If the number of outstanding units is 200 core and sale charges is 1.5% on the NAV, what
is the public offering price?

Question 2 :
The following portfolio details of a fund are available :
Stock Share Price (Rs.)
A 2,00,000 35
B 3,00,000 40
C 4,00,000 20
D 6,00,000 25
The Fund has accrued management fees with the portfolio manager totaling Rs.30,000.
There are 40 lakhs share outstanding. What is the NAV of the fund ? if the fund is sole with
a front end load of 5%, what is the sale price ?

Question 3 :
Calculate the today’s NAV of flexi fund if the following details are given :-
Yesterday’s NAV = Rs. 12.87, Total number of outstanding units : 1.25 Crores Face value =
Rs. 10. Expenses = Rs. 1 lakh [Assumes sale NAV& Repurchase NAV to be Rs. 12.87].
Appreciation of portfolio today 12 lakhs
Units fresh subscription 2 lakhs
Units redemption 0.75 lakhs
Dividend received 1 lakhs

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 Question 4 :
A mutual fund made an issue of 10,00,000 units of Rs. 10 each on January 01, 2008.
No entry load was charged. It made the following investments :
Rs.
50,000 Equity shares of Rs. 100 each @ Rs. 160 80,00,000
7% Government Securities 8,00,000
9% Debentures (Unlisted) 5,00,000
10% Debentures (Listed) 5,00,000
98,00,000
During the year, dividends of Rs. 12,00,000 were received on equity shares. Interest on all
types of debt securities was received as and when due. At the end of the year equity shares
and 10% debentures are quoted at 175% and 90% respectively. Other investments are at
par.
Find out the Net Asset Value (NAV) per unit given that operating expenses paid during the
year amounted to Rs. 5,00,000. Also find out the NAV, if the Mutual Fund had distributed
a dividend of Re. 0.80 per unit during the year to the unit holders.

Question 5 :
1 April 2009 Fair Return Mutual Fund has the following assets and prices at 4.00 st p.m.
Shares No. of Shares Market Price Per Share (Rs.)
A Ltd. 10000 19.70
B Ltd. 50000 482.60
C Ltd. 10000 264.40
D Ltd. 100000 674.90
E Ltd. 30000 25.90
No. of units of fund 8,00,000
Please calculate :
1. NAV of the Fund.
2. Assuming Mr. X, a HNI, send a cheque of Rs.50,00,000 to the Fund and Fund
Manager purchases 18000 shares of C Ltd. and balance is held in bank. Then what
will be position of fund.
3. Now suppose on 2 April 2009 at 4.00 p.m. the market price of shares is as follows :
Shares Rs.
A Ltd. 20.30
B Ltd. 513.70
C Ltd. 290.80
D Ltd. 671.90
ELtd. 44.20
Then what will be new NAV.

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 Question 6 :
Based on the following information, determine the Net Asset Value (NAV) on a regular
income scheme on per unit basis :
Rs (in crores)
Listed Equity shares at cost (ex-dividend) 20.00
Cash in hand 1.23
Bonds & Debentures at cost 4.3
Of these, Bonds not listed & quoted 1
Other fixed interest securities at cost 4.5
Dividend accrued 0.8
Amount payable on shares 6.32
Expenditure accrued 0.75
Number of Units (Rs.10 face value each): 20,00,000
Current realizable value of fixed income 106.5
Securities of face value of Rs.100.
The listed equity shares were purchased when the index was 1,000 Present index is 2,300
Value of listed bonds and debentures at NAV date is 8
There has been a diminution of 20% in unlisted bonds and debentures.

7. HOLDING PERIOD YIELD :

Yield means return and return should be calculated in terms of % P.A. Holding period yield means
what does the investor earn for the period during which he was holding mutual fund units. It
calculation of Ex-post yield (Kitna kamaya)

We are required to calculate HPY for different types of mutual fund plans. The most prominent
mutual fund plans are
1. Pay out plan
2. Reinvestment Plan
3. Bonus Plan
4. Growth Plan

1. Pay-out Plan :
As the name indicates, under this plan mutual funds distributes dividend and capital gain
to its investor from time to time.

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛+𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐺𝑎𝑖𝑛 𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛+𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐴𝑝𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛

HPY (for pay out plan) = x 100
𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒

Question 7 :
A MF that had an NAV of Rs.20 in the beginning of the month made an income and capital
gain distribution of Rs.0.0375 and Rs.0.03 per share respectively during the month, and
then ended the month with an NAV of Rs.20.06. Calculating the monthly return.

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 Question 8 :
A Mutual Fund has a NAV of Rs.20 on 1.12.09. During December 2009, it has earned a
regular income of Rs.0.03 per unit. On 31.12.09, the NAV was Rs.20.06. Calculate the
monthly return and annual return.

Question 9 :
A mutual fund has a net asset value (NAV) of Rs 50 at the beginning of the year a sum of
Rs 4 was distributed as income besides Rs 3 as capital gain distribution. At the end of the
year NAV was Rs 55. Calculate the net return of the year. Suppose the aforesaid mutual
fund in the next year gives a dividend of Rs 5 as income distribution and no capital gains
distribution and the NAV at the end of the second year is Rs 50. What is the return for the
second year?

Question 10 :
A has invested in three Mutual Fund schemes as per details below:
MF A MF B MF C
Date of Investment 1.12.03 1.1.04 1.3.04
Amount of Investment Rs 50,000 1,00,000 Rs 50,000
NAV on entry date Rs 10.50 Rs 10 Rs 10
Dividend received up to 31.3.04 Rs 950 Rs 1500 Nil
NAV as at 31.3.04 Rs 10.40 Rs 10.10 Rs 9.80
What is the effective yield on per annum basis in respect of each of the three schemes to
Mr. A upto 31.03.04?

Question 11 : Mr. Suhail

Mr. Suhail has invested in three Mutual fund schemes as per details below :
Scheme X Scheme Y Scheme Z
Date of Investment 01.04.11 01.05.11 01.07.2011
Amount of Investment Rs 12,00,000 Rs 4,00,000 Rs 2,50,000
Net Asset Value at entry date Rs 10.25 Rs 10.15 Rs 10.00
Dividend received up to 31.07.2011 Rs 23,000 Rs 6,000 Nil
NAV as at 31.7.2011 Rs 10.20 Rs 10.25 Rs 9.90
You are required to calculate the effective yield on per annum basis in respect of each of
the three schemes to Mr. Suhail up to 31.07.2011.

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2. Re-investment Plan :
In this plan, the dividend and capital gain distributions are not distributed to the holder,
instead they are re-invested into mutual fund. Holders are issued units at NAV existing on
the date of re-investment.

Question 12 :
A Mutual Fund having 300 units has shown is NAV of Rs.8.75 and Rs. 9.45 at the beginning
and at the end of the year respectively.
The Mutual Fund has given two options:
a) Pay Rs. 0.75 per unit as dividend and Re. 0.60 per unit as a capital gain, or
b) These distributions are to be reinvested at an average NAV of Rs. 8.65 per unit.
What difference it would make in terms of return available and which option is preferable?

Question 13 : Mr. X
Mr. X, an investor purchased 200 units of ABC Mutual Fund at rate of Rs. 8.50 p.u., one
year ago. Over the year Mr. X received Rs. 0.90 as dividend and had received a capital gains
distribution of Rs. 0.75 per unit.
You are required to find out:
Mr. X’s holding period return assuming that this no load fund has a NAV of Rs. 9.10 as on
today.
Mr. X’s holding period return, assuming all the dividends and capital gains distributions are
reinvested into additional units as at average price of Rs. 8.75 per unit.

3. Bonus Plan & Growth Plan :

Bonus Plan : As the name indicates, under this plan mutual fund issues bonus units to its
holders at random interval. Holders gets such for free instead of getting dividend
distributions and capital gain distributions.

Growth Plan : There are no dividend distributions, no capital gain distribution, no units on
reinvestments, no bonus units. The only gain that the holder gets is in terms of capital
appreciation, i.e the difference between the NAV’s at beginning and at the end.

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 Question 14 : Sun Moon Mutual Fund
Sun Moon Mutual Fund (Approved Mutual Fund) sponsored open-ended equity oriented
scheme "Chanakya Opportunity Fund". There were three plans viz. 'A'- Dividend Re-
investment Plan, 'B' - Bonus Plan & 'C'- Growth Plan.
At the time of Initial Public Offer on 1-4-1995, Mr. Anand, Mr. Bachhan & Mrs. Charu,
three investors invested Rs. 1,00,000 each and chose 'B', 'C' & 'A' Plan respectively.
The History of the Fund is as follows :
Date Dividend (%) Bonus Net Asset Value per Unit Ratio (FV Rs, 10)
Plan A Plan B Plan C
28-07-1999 20 30.70 31.40 33.42
31-03-2000 70 5:4 58.42 31.05 70.05
31-10-2003 40 42.18 25.02 56.1$
15-03-2004 25 44.45 29.10 64.28
31-03-2004 1:3 42.18 20.05 60.12
24-03-2005 40 1:4 48.10 19.95 72.40
31-07-2005 53.75 22.98 82.07
On 31st July all three investors redeemed all the balance units. Calculate annual rate of
return to each of the investors.
Consider:
a. Long-term Capital Gain is exempt from Income tax.
b. Short-term Capital Gain is subject to 10% Income tax.
c. Security Transaction Tax 0.2 percent only on sale/redemption of units.
d. Ignore Education Cess.

Question 15 : T Ltd.
T Ltd. has promoted an open-ended equity oriented scheme in 1999 with two plans—
Dividend Reinvestment Plan (Plan-A) and a Bonus Plan (Plan-B); the face value of the units
was Rs. 10 each. X and Y invested Rs. 5,00,000 each on 1.4.2001 respectively in Plan-A and
Plan-B, when the NAV was Rs. 42.18 for Plan
- A and Rs. 35.02 for Plan - B. X and Y both redeemed their units on 31.3.2008. Particulars
of dividend and bonus declared on the units over the period were as follows:
Date Dividend Bonus Ratio NAV
Plan A Plan B
15.09.2001 15 — 46.45 29.10
28.07.2002 — 1:6 42.18 30.05
31.03.2003 20 — 48.10 34.95
31.10.2003 — 1:8 49.60 36.00
15.03.2004 18 — 52.05 37.00
24.03.2005 — 1:11 53.05 38.10
27.03.2006 16 — 54.10 38.40
28.02.2007 12 1:12 55.20 39.10
31.03.2008 — — 50.10 34.10

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You are required to calculate the annual return for X and Y after taking into consideration
the following information:
(i) Securities transaction tax @ 2% on redemption.
(ii) Liability of capital gains to income tax
(a) Long-term capital gain-exempt; and
(b) Short-term capital gains at 10% plus education cess at 3%.

Question 16 : Mr.X
Mr. X on 1.7.2000, during the initial offer of some Mutual Fund invested in 10,000 units
having face value of Rs. 10 for each unit. On 31.3.2001 dividend operated by the M.F was
10% and Mr. X found that his annualized was 153.33%. On 31.12.2002, 20% dividend was
given, On 31.3.2003 Mr. X redeemed all his balance of 11,296.11 units when his annualized
yield was 73.52%. What are the NAVs as on 31.3.2001, 31.12.2002 and 31.3.2003?

Question 17 : Mr.X
On 01-07-2010, Mr. X Invested Rs 50,000/- at initial offer in Mutual Funds at a face value
of Rs 10 each per unit. On 31-03-2011, a dividend was paid @ 10% and annualized yield
was 120%. On 31-03-2012, 20% dividend and capital gain of Rs 0.60 per unit was given.
Mr. X redeemed all his 6271.98 units when his annualized yield was 71.50% over the period
of holding.
Calculate NAV as on 31-03-2011, 31-03-2012 and 31-03-2013.
For calculations consider a year of 12 months.

Question 18 : Mr.A
Mr.A can earn a return of 10% by investing in equity shares of its own. Now he is
considering a recently announced equity based MF scheme in which initial expenses are
6% and annual recurring expenses of 2%. How much should the MF earn to provide Mr. A
return of 10%?

Question 19 : Mr. A
Mr. A can earn a return of 16 per cent by investing in equity shares on his own. Now he is
considering a recently announced equity based mutual fund scheme in which initial
expenses are 5.5 per cent and annual recurring expenses are 1.5 per cent. How much
should the mutual fund earn to provide Mr. A return of 16 per cent?

Question 20 : Mr. J
Mr. J Purchased an open ended load fund with a NAV of Rs 50 per unit and 3% sales load.
One year later J sold the fund with a NAV of Rs 54 per unit with a back end load of 3% as
well. During a year, fund paid Rs 0.25 dividend per unit and distributed Rs 0.40 in capital
gains per unit. If J invested Rs 10,000 in this fund, what was J’s rupee and percentage return
over the year. What would have been the return if this was a no load fund?

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 Question 21 : ABC Mutual Fund
On 1-4-2012 ABC Mutual Fund issued 20 lakh units at Rs 10 per unit. Relevant initial
expenses involved were Rs 12 lakhs. It invested the fund so raised in capital market
instruments to build a portfolio of Rs 185 lakhs. During the month of April 2012 it disposed
off some of the instruments costing Rs 60 lakhs for Rs 63 lakhs and used the proceeds in
purchasing securities for Rs 56 lakhs. Fund management expenses for the month of April
2012 was Rs 8 lakhs of which 10% was in arrears. In April 2012 the fund earned dividends
amounting to Rs 2 lakhs and it distributed 80% of the realized earnings. On 30-4-2012 the
market value of the portfolio was Rs 198 lakhs.
Mr. Akash, an investor, subscribed to 100 units on 1-4-2012 and disposed off the same at
closing NAV on 30-4-2012. What was his annual rate of earning?

: PRACTICAL QUESTIONS :

Question 22 : [Link]
[Link], a practicing Chartered Accountant, can earn a return of 15 percent by investing
in equity shares on his own. He is considering a recently announced equity based mutual
fund scheme in which initial expenses are 6 percent and annual recurring expenses are 2
percent.
(i) How much should the mutual fund earn to provide [Link] a return of 15 percent
per annum?
(ii) [Link]’s current Annual Professional Income is Rs.40 Lakhs. His portfolio value is
Rs.50 lakhs and now he is spending 10% of his time to manage his portfolio. If he
spends this time on profession, his professional income will go up in same
proportion. He is thinking to invest his entire portfolio into a Multicap Fund,
assuming the fund’s NAV will grow at 13% per annum (including dividend).
You are request to advise [Link], whether he can invest the portfolio into Multical Funds?
If so, what is the net financial benefit?

Question 23 : ANP Plan

ANP Plan, a hedge fund currently has assets of Rs.20 crore. CA. X, the manager of fund
charges fee of 0.10% of portfolio asset. In addition to it he charges incentive fee of 2%. The
incentive will be linked to gross return each year in excess of the portfolio maximum value
since the inception of fund. The maximum value the fund achieved so far since inception
of fund about one and half year ago was Rs.21 crores.
You are required to compute the fee payable to CA. X, if return on the fund this year turns
out to be
(a) 29%, (b) 4.5%, (c) –1.8%

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Question 24 : Vishnu Fund
The following particulars relating to Vishnu Fund Scheme :
Particular Value
Rs. in Crores
1 Investments in Shares (at cost)
a. Pharmaceutical companies 79
b. Construction Industries 31
c. Service Sector Companies 56
d. IT Companies 34
e. Real Estate Companies 10
2 Investments in Bonds (Fixed Income)
a. Listed Bonds (8000, 14% Bonds of Rs.15,000 each) 12
b. Unlisted Bonds 7
3 No. of Units outstanding (crores) 4.2
4 Expenses Payable 3.5
5 Cash and Cash equivalents 1.5
6 Market expectations on listed bonds 8.842%

Particulars relating to each sector are as follows :

Sector Index on Purchase date Index on Valuation date
Pharmaceutical companies 260 65
Construction Industries 210 450
Service Sector Companies 275 480
IT Companies 240 495
Real Estate Companies 255 410
You are required to calculate the following :
(i) Net Asset Value of the fund
(ii) Net Asset Value per unit
(iii) If the period of consideration is 2 years, and the fund has distributed Rs.3 per unit
per year as cash dividend, ascertain the Net return (Annualized).
(iv) Ascertain the Expenses ratio.

Question 25 :
During the year 2017 an investor invested in a mutual fund. The capital gain and dividend
for the year was Rs.3.00 per unit, which were re-invested at the year end NAV of Rs.23.75.
The investor had a total units of 26,750 as at the end of the year. The NAV had appreciated
by 18.75% during the year and there was an entry load of Rs.0.05 at the time when the
investment was made.
The investor lost his records and wants to find out the amount of investment made and
the entry load in the mutual fund.

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 Question 26 :
On 1st April, an open ended scheme of mutual fund had 300 lakh units outstanding with
Net Assets Value (NAV) of Rs.18.75. At the end of April, it issued 6 lakh units at opening
NAV plus 2% load, adjusted for dividend equalization. At the end of May, 3 Lakh units were
repurchased at opening NAV less 2% exit load adjusted for dividend equalization. At the
end of June, 70% of its available income was distributed.
In respect of April-June quarter, the following additional information are available:
[Link] lakhs
Portfolio value appreciation 425.47
Income of April 22.950
Income for May 34.425
Income for June 45.450
You are required to calculate
(i) Income available for distribution;
(ii) Issue price at the end of April;
(iii) repurchase price at the end of May; and
(iv) net asset value (NAV) as on 30th June.

Thanks ….

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