Asset Management - IC-99 Exam Study Notes

A Government security is a tradable instrument issued by the Central Government or the State Governments. It acknowledges the Governments debt obligation.
In November 2013, IRDA decided to double the investment limit in liquid mutual funds for general insurers. At present, general insurance companies are allowed to invest 1.5% of assets into liquid mutual funds under the approved investment category where the size of the fund is above Rs. 2,000 crore. Now, they will be allowed to invest an additional 1.5% or Rs.3,500 crore.
Some of the advantages of mutual fund investments include : i) Numerous options for investments, ii) Professional management, iii) Diversification, iv) Convenient administration, v) Higher return potential, vi) Low cost management, vii) Liquidity, viii) Safety and transparency, ix) Subject to stringent SEBI Regulations, x) Beating inflation.
Some of the disadvantages of mutual fund investments include : i) No insurance and no assurance for return, ii) Additional fees and expenses, iii) No intraday trading on mutual funds, iv) Poor performance in most of the period, v) Loss of control, vi) More than required cash reserves
Performance of the mutual funds can be quantified with the mathematical calculation of the historical returns. Return is determined by combined effect of two elements : i) Net Asset Value (NAV), ii) Cost of mutual funds

Important Points for IC 99 - Asset Management Exam