AFM FULL ENGLISH DAY 3 By CA Sankalp Kanstiya

Added: 2026-05-28

[00:00:00]Uh hey guys can you hear me? Can you see me? Please confirm the yes audio video perfect or not and then we will take things forward.

[00:00:27]Sure.

[00:00:50]Let's start guys.

[00:00:52]Everything fine? All right.

[00:01:01]Lights, camera, rolling, action. Uh, have you all done your homework?

[00:01:07]I think I had given question three and question 12 as homework, guys.

[00:01:14]Is it done? Did you find any issues or was it manageable?

[00:01:21]All right.

[00:01:24]Shall let the game begin for today.

[00:01:32]Yes.

[00:01:41]Okay.

[00:01:45]Just a moment. Yeah. Manageable. But see, please ensure that you guys are very much regular in terms of your homework.

[00:01:55]Yes.

[00:01:58]Here we go.

[00:02:06]Okay. Namaste. This is CS Kia and I welcome each one of you in this amazing session on CA Final AFM.

[00:02:15]Yes. Let the game begin. full English session. So guys, now we are going to start with some question and answers. Are you all ready? Yes. Sure.

[00:02:31]Now we are going to start with question number 15. So please open your optimized book and in that all of us will open question number 15. A very nice question. Let's start.

[00:02:46]A mutual fund company has the following assets under it on the close of business as on M limit L limited M limited N limited and P limited number of shares 20 30 20 60 1st February market price is given 2nd February market price is given now total number of units six lakh Calculate.

[00:03:18]Okay. Calculate net asset value of the fund. Following information is given.

[00:03:23]Assuming Mr. A submits a check of rups 30 lakh to the mutual fund and the fund manager of this company purchases 8,000 shares of M limited and the balance is held in the bank. In such a case, what would be the position of the fund? Find the new nav of the fund as on 2nd February 2012.

[00:03:47]Okay guys, let's start. The first thing that they've asked for is calculate the net asset value of the fund. So when they ask for the net asset value, can I say it is based on the current net asset value. So can I say current is basically uh today's date. So today's date is say 1st February. This will give you the current net asset value of the fund.

[00:04:09]Then the investor will come with rupees 30 lakhs. He will give us 30 lakh rupees. In exchange we will give him units of the 30 lak rupees received of the 30 lak rupees received a mutual fund company is going to invest in 8,000 shares of M limited. All right. So this is the whole scenario. After the investment is done in M limited again a re computed nav is calculated that is going to be based on 2nd February. So this is the whole crux of the sum shall we start everyone? All right. So here we go. Let's go. Question 15 solution.

[00:05:08]First we have to calculate the nav of the fund. So let's start. First things first calculation of net asset value of the fund.

[00:05:24]Calculation of net asset value of the fund.

[00:05:30]So there are four shares with us.

[00:05:39]1 is C we write here number of shares L M NP how many number of shares are there so it will be 20,000 30,000 20,000 and 60,000 these are the number of shares which are available also the market price per share is there so we will quickly write down 20,000 30,000. These are the number of shares with the mutual fund company. With the mutual fund company 20,000, 30,000 and then again 20,000 shares and finally 60,000 shares. Okay. So these are the number of shares which are available.

[00:06:25]Then then we have the market price per share.

[00:06:31]Correct? So we will write down market price per share. What is the market price per share? Correct. It is 20 312.4 361.2 and 505.1.

[00:06:51]So 23 is 1 2.4 361.2 and 505.1.

[00:06:57]Tell me what is the net asset value of the fund? This is what we call as the market value.

[00:07:06]This is what we call as the market value. So can I say 20,000 into 20 will be rupees 4 lakh. So we will write here 4 lakh. In the same way we will calculate the market value of all the investments which are there with us.

[00:07:25]So we will write here guys market value of investments.

[00:07:30]We will write here market value of investments. Tell me how much is the market value guys. Come on. Yes. Okay.

[00:07:47]Every somebody please confirm. Is it 4 cr 73 lakhs 2,000 4 cr 73 lakh 2,000 Yes. Okay. Then divide by the number of units.

[00:08:06]Divide by the number of units. Tell me how many units are there outstanding?

[00:08:11]Well, it is given as six lakhs units are there. So divide by number of units and that is six lakh and that is six lakh units. Okay. So we will get therefore we will get the nav per unit. Tell me how much was the nap per unit?

[00:08:53]Correct. It will be rupees 78.8366 per you. No prices for guessing. Easy peasy lemon squeezy. Sure. Done. Are we done with this guys?

[00:09:10]Sure.

[00:09:13]So NA of the fund is 78.8366 per unit. Okay.

[00:09:23]Done. Now starts the real question. See here.

[00:09:30]Mr. A submits a check of 30 lakh to the fund and the fund manager of the company purchases 8,000 shares. Balance is held in bank.

[00:09:44]In such a case, what will be the fund position? Shall let's start and try to calculate. Here we go. Let's go. Second part.

[00:09:58]Okay. Mr. A comes to our fund.

[00:10:04]Yeah. Mr. A comes with rupees 30 lakhs. The first question that Mr. A is going to ask is sir, how many units will I get? Tell me guys, what is going to be your answer? Mr. A comes with rupees 30 lakhs. Tell me what is going to be your answer. How many units will Mr. A get? Can I say Mr. A? To Mr. A we will say that brother 78.8366 is the nav per unit. So yes, so divide by nav per unit.

[00:10:52]divide by nav per unit and it is 78 correct 8366 per unit. You guys tell me how many units will Mr. A get? How many units will Mr. A get? So therefore number of units for Mr. A will be no 30 lakhs divide by 7836 correct is it? Thank you Vashnavi 38.

[00:11:30]Thank you Swadi 38503.39 units. Okay 380539 units.

[00:11:42]Got it everyone?

[00:11:45]Done.

[00:11:48]So this is the first thing that we have done. I'll just write it here.

[00:11:54]Then first all lot units to Mr. A as per prevailing napper unit as per prevailing napper unit.

[00:12:29]Now since Mr. A has received units.

[00:12:42]The outstanding units can I say will increase guys. So we will say the outstanding units with now the mutual fund company will be six lakh which it already has plus 38053.59 units. Since Mr. has received units outstanding units with the mutual fund company as on second fifth is as follows.

[00:13:28]So it will be existing 6 lakh units which are there guys plus 38053.39 units 38053 59 sorry 39 units gota Done. Done. Now what happens? Continue the story. Continue the story. Now with the 30 lak rupees so received, the mutual fund company invests into 8,000 shares of M Limited. Write out now mutual fund company will invest rupees 30 lakhs in shares of M limited Okay.

[00:14:45]And buys and buys 8,000 shares.

[00:14:57]How much money will go in buying that shares? Because they have said, if you read the question properly, they have said that for the balance amount, we will keep it in cash. So the balance amount is held in bank. Okay. Sure. So here we will say that therefore 8,000 shares at the rate 312.4 per share.

[00:15:30]312.4 per share.

[00:15:34]Okay. So how much money is invested guys? 8,000 into 312.4 24 lakh 999200 rupees.

[00:15:52]Okay.

[00:15:57]And the balance will remain in cash. So we will write here therefore balance cash in hand / bank is equal to so can I say rupees 30 lakhs less 24.99200.

[00:16:38]Correct. It will be rupees 5 lakh 800. It will be rupees 5 lakh 800. Gotcha.

[00:16:49]So this is the whole story. This is the whole story for the 2nd of Feb. for the 2nd of Feb. Now based on this we have to recalculate the nav. Based on this we have to recalculate the nav. Guys tell me one thing. Tell me one thing that now for M we had 30,000 shares. Can I say now we will have 38,000 shares. That's right. Now we will have 38,000 shares. Ch. Let's write down.

[00:17:32]So finally calculation of You Now can I say L M NP limited the total number of shares which are there now as on 2nd Feb after the new investor has walked in after the new investor has walked in after we have given We've given him units after we have purchased new shares plus now we have cash balance of 5 lakh 200 also what is going to be the new nav guys come on let's do it so 20,000 multiply by 20.5 so this will be 20.5 okay then 360 383.1 and 503.19 so it is going to be 20.5 then 360 383.1 and 503.9.

[00:20:02]Okay.

[00:20:04]And finally we will get the market value.

[00:20:15]Finally we will get the market value. So what will be the market value? So see here 20,000 into 20.5 then 38,000. Now remember to add this 8,000 shares which we have just recently purchased. Guys, there is a very high chance that you may skip out on adding this. So, please ensure that this is taken. Now, will you guys quickly tell me what is the total market value?

[00:20:44]Yes. So, that having said that that is going to be the market value of investments.

[00:20:52]So, this is going to be my market value of investment.

[00:21:09]Market value of investment will be how much? Okay. 5 cr is it 5 cr 19 lakh 86,000 plus don't forget to add the cash.

[00:21:24]Add the cash bag.

[00:21:27]How much is that? 5 lakh 800 in the hustle bustle of exam there is a very high chance that you may forget taking this like a hidden adjustment keep that ensure that you are taking this okay okay so this is going to be my net asset value I don't think so there are any uh expenses so we will get 5 cr 24 lakh 86,800 rupees then divide it by outstanding units how many outstanding units are there guys now correct 6 lakh 38,53 so we will write here 6 lakh 38, 053 I hope you presentation is as equally good as mine guys because this is how you are going to present in the exam as well. And finally finally finally we will get the nav per unit which is correct 82608 per unit. Gotcha. Everybody any doubts?

[00:22:51]Anyone got it sir?

[00:22:58]H.

[00:23:09]Okay. Now with this we complete question number 15 and we are all set.

[00:23:19]to start question number 16. No, 16 is going to be your homework. If you observe question 16 is almost a replica of question 15. So can I say you guys can try it by yourself. See this number of shares are there market price fund value you have to first find on 1st April then 50 lakh check you will get from an investor 18,000 shares then closing value as on April 2nd and finally the noon app everybody done and done.

[00:24:05]So, question number 16 will be your homework.

[00:24:18]Sure.

[00:24:24]Done. Okay. Ch. Now we move on to the new concept guys. What would be that concept number? I have lost a count of that. Are you guys have any count? Yeah, I think fifth was the last. So, let this be the sixth concept. Sure. Let's try and find out the concept number six.

[00:24:45]Come dividend x dividend. So we write here concept of yes concept of come dividend and x dividend. Please write it down.

[00:25:14]An important concept. Any idea what exactly it means?

[00:25:19]Yes.

[00:25:42]Write down this heading.

[00:25:55]H okay. Now let's try and understand this with the help of an example. That way we'll be able to understand things in a better manner. Sure. Let's start.

[00:26:07]Okay. Now let's take example number one guys. Example number one is Okay.

[00:26:14]I think there is some issue with the just a moment of iPad.

[00:26:27]Yes. Example number one is now what we are going to start with. Suppose there is a stock of Reliance Industries Limited. Obviously we all know Reliance Industries Limited is listed on stock exchange. Is listed on stock exchange.

[00:26:52]Now you have to answer guys please pay attention because you guys have to answer.

[00:26:58]On 1st Jan the price of Reliance is rupees 2750 per share is rupees 2750 per share and guys this price is come dividend price. This price is come dividend. What is come? Come means including this price is come dividend. Okay. Now on 5th of Jan on 5th of Jan Reliance declares and pays dividend declared and paid on the same day.

[00:27:49]declared and paid of rupees 150 per share. Dividend declared and paid of rupees 150 per share. Tell me what is going to the price on 6th of Jan. What is going to be the price of Reliance on 6th of Jan? Whether it will be 2900 0 260 0 2750 itself or maybe something else which I have not said. Come on everybody we'll give you all 2 minutes to answer H.

[00:28:33]That's right.

[00:28:40]Okay. So 6th Jan the price will become it will become 2,600 guys. See dividend is paid to whom? Dividend is paid to the equity shareholder. The value of this equity shares is 2750.

[00:29:06]Of this I am giving you back your 150 rupees. dividend is paid from the profit and loss account of the company. So I have distributed 150 rupees of your profit to you. So obviously now the price will fall down by exactly that much amount. And this happens in real life as well guys. So 6th Jan the price will become 2600 per share.

[00:29:33]2600 per share. And this 2600 per share guys will be called as a X dividend price. Are you understanding guys? So this will be rupees 2750 minus 150 rupees.

[00:29:56]Okay. Okay.

[00:30:00]So let's take an example number two.

[00:30:03]Let's take an example number two.

[00:30:09]Okay, let's go. We will write here.

[00:30:15]Suppla again listed on stock exchange.

[00:30:23]Again listed on stock exchange. Now on first fair the price of SIPLA was rupees 250 and this price is say come dividend.

[00:30:43]Okay.

[00:30:45]On 2nd Feb.

[00:30:49]On 2nd Feb, dividend declared and paid at the rate rupees 50 per share.

[00:31:10]Tell me what will be the price.

[00:31:13]Therefore on second Feb or third Feb rather the price will become correct the on third FB the price will become how much 250 minus 50 200 rupees per share. Gotcha everybody. This 200 will be called as a X dividend will be called as a X dividend price.

[00:31:52]Okay. Sure. Please copy everyone. Have you copied? Once you copy, just give me a confirmation.

[00:32:06]Great. So what have we understood from this?

[00:32:11]Come dividend X dividend price. What have we understood guys? See here.

[00:32:18]What have we understood? Okay. Come dividend price. So we understand that the share price including the dividend component.

[00:32:52]The share price including the dividend component that is price of share before dividend declaration.

[00:33:22]Okay. And the other is what?

[00:33:25]The other is X dividend.

[00:33:33]X dividend will be what guys?

[00:33:37]The share price.

[00:33:42]Correct. After paying the dividend, the share price after paying the dividend is called X dividend price.

[00:34:05]So, please write please write on.

[00:34:11]And now we come to the question number four every come to the question number four. Come on everyone start open question number four.

[00:34:56]Based on the following information, determine the NAV of a regular income scheme on per unit basis.

[00:35:10]Listed shares at cost X dividend. So after the dividend is distributed, the price remains. We purchase the shares at 20 crores.

[00:35:22]Cash in hand 1.23 crores. Bonds and debentures at cost 4.3 of these bonds of these of these bonds not listed and quoted one of these. Huh?

[00:35:37]So 4.3 includes this one. 4.3 includes one.

[00:35:44]Okay. Okay. Other fixed securities at cost. Dividend acred. Amount payable on shares. Expenditure acred. Number of units 20 lakhs. Current realizable value of fixed income securities of rupees face value 1006.5.

[00:36:06]The listed shares were purchased when index was 1,000. Present index is 2,300.

[00:36:13]Value of listed bonds and debentures on NAV date is 8 crores. There has been a dimmunition dimmunition of 20% in unlisted bonds and debtures.

[00:36:30]Ch let's start guys.

[00:36:35]Ch now we have read the question first.

[00:36:38]What are we required to calculate here guys? We are required to calculate your nav. What is nav?

[00:36:48]What is nav? First thing that we are going to do is write down the definition of nav. First we should always write down the formula. Sir in exam we have to write down the formula. 101% yes. Don't even have a second doubt about it. If you have attended my sessions, my lectures, all of the formulas should be on the tip of your tongue and you have to write it in the examination. Make it a rule for yourself. Okay. Sure. Now, here we go.

[00:37:20]Question number four.

[00:37:24]Solution.

[00:37:31]Question number four, solution. Let's start.

[00:37:34]So we are starting with nav per unit.

[00:37:44]We are starting with nav per unit. So now per unit is equal to market value of investment plus cash in hand.

[00:38:06]less outstanding expenses will give us total NAV divide by outstanding number of units and we will get what is equal to N per unit is equal to n per unit.

[00:38:39]Watch everybody. Yes. So this is how we are going to start.

[00:38:51]Okay. Then now we'll just write down here. We had some space out here.

[00:39:00]Question four solution h now we will make the statement calculating nav per unit. So write down statement of nav guys. Come on write down statement of nav net asset value. So let's make it.

[00:39:34]Come on.

[00:39:37]Madam first is the listed bonds.

[00:39:53]Okay, let's go step by step.

[00:39:58]First is the listed shares I mean so sorry.

[00:40:05]Yeah first is listed shares. Any idea what will be the amount for listed shares guys?

[00:40:12]So I will write here that there were 20 crores of shares when we had purchased when the index was 1,000.

[00:40:31]Now the index is 2300.

[00:40:35]So tell me what will be the value of shares from 20 it will go to correct 46. So we will write here guys 20 crores when the index is 1,000 20 crores when the index is 1,000.

[00:41:06]Now when the index is 2300 cross multiply and we will get 46 crores guys. So we will immediately write here 46 right everyone we will write here 46.

[00:41:28]Can we move on?

[00:41:32]Sure.

[00:41:40]Second part. Second part of the question is cash in hand. Okay. Cash in hand. We don't have to do anything. It's so good.

[00:41:48]1.3 23 as it is. And any which case we didn't see any uh adjustment impacting cash in hand. So we will just write here cash in hand as done.

[00:42:02]Next sir next third one okay what is it bonds and deentures at cost of these bonds are not listed and quoted are one so out of this 4.3 one is not listed and quoted remaining 3.3 is listed and see what adjustment they have given they have very clearly said value of listed and bonds and deentures on nav date is Wait, did you understand? Wait, I I'll I'll make a small diagram to make you understand. We will do it. Don't worry.

[00:42:38]Write down bonds and debentures.

[00:42:46]Bonds and debentures.

[00:42:49]Okay.

[00:42:54]So, we will write here total is 4.3 of which there is listed and there is unlisted.

[00:43:14]Listed is 3.3. So unlisted will be one. This is now at the rate 8. This is now at the rate 8. But as far as unlisted is concerned, it will remain at one. Any adjustment is given for the unlisted guys. Any adjustment is given for the unlisted?

[00:43:44]Nothing. See here nothing. So this is done. This is done. This is done. Oh, there is a dimminion of 20% in unlisted bonds and deentures. So there is an adjustment related to that. What is that adjustment guys? that now this is equal to.8 1 - 20%.

[00:44:09]1 - 20%.

[00:44:13]Gotcha. So 8 +.8 this whole the bonds and deenture will become how much? 8.8. Correct. Sure.

[00:44:35]Any doubts? Anyone got it now?

[00:44:47]Done.

[00:44:53]So bonds and debentures listed 3.3 is worth eight given in the question one has a dimmunition of diminion of 20%. So that is8 so 8 +8 will be 8.8 done.

[00:45:18]Next fourth adjustment. Now let me tell you one thing about the fourth adjustment guys. Let me tell you one thing about the fourth adjustment. Ask me what's a what this fourth adjustment they have written other fixed income securities at cost. Can you see this other fixed income securities at cost?

[00:45:37]Can you this is 4.5 and see the connected adjustment current realizable value of fixed income securities of 100 rupees is now become 106.5 has now become 106.5. Can anybody tell me what will be the answer?

[00:46:00]Can anybody tell me what will be the answer? So 4.5 when we had invested now it is worth 106.5.

[00:46:13]So how much will this become? So we will write here fixed income securities fixed income securities and we will write down that when we had purchased at 4.5 crores at that time it was obviously at cost.

[00:46:45]At cost so at cost means at face value of 100. Now the value has become how much? Now the value has become 106.5.

[00:46:58]106.5.

[00:46:59]So tell me what will it be? 106.5 into 4.5 divide by 100. Right guys? It will be 4.7925.

[00:47:10]It will be 4.7925.

[00:47:15]Okay. Okay sir. Okay. Now if you open the module the same question is there in the module but in the module they have said other fixed income securities will be valued at cost only. We have not valued it at cost. We have taken it at market value. But they have specified.

[00:47:34]So you can value it at cost. Not a problem. But here if market value is given and we have not specified that it should be valued at cost then we will value it at market value which is 4 7925. Gotcha everybody are we clear guys? Great. Then any other adjustment?

[00:47:52]So done. This is done. Okay. Dividend acred.8.

[00:47:58]Let's do this.

[00:48:04]Dividend acred.8.

[00:48:13]Okay. Dividend acred.8.

[00:48:17]Then expend amount payable on shares and expenditure acured. Let's write down gross asset value.

[00:48:32]We will write down gross asset value. Tell me what will be the gross asset value. Guys tell me what will be the grass gross asset value. Can you please do the calculations and tell me the amount so that I can then move on.

[00:48:59]Okay.

[00:49:29]Yes.

[00:49:31]So the gross asset value will be 61.625.

[00:49:35]Thank you Deep and Swadi. So we will write here 61 625.

[00:49:44]61.625 Okay sir.

[00:49:50]Then we need the net asset value. So what will we do? Reduce less outstanding liabilities.

[00:50:05]Outstanding liabilities. Tell me what will be outstanding liabilities. So there are two outstanding liabilities.

[00:50:12]one amount payable on shares and the other expenditure acrew.

[00:50:22]So amount payable on shares and expenditure acred.

[00:50:44]Okay. Amount payable on shares obviously is how much?

[00:50:50]6.32 and expenditure acrewed 75. So 6.32.75 and finally finally finally finally we will get the net asset value.

[00:51:12]Tell me guys what is the net asset value?

[00:51:16]Uhhuh. Come on, Anerod.

[00:51:19]Correct. 54 5525.

[00:51:27]And finally dividing by the outstanding units. Now the outstanding units usual calculation is so simple. No, it is given outstanding units. How much? 20 lakh. Write down it will go wrong. It will go wrong. The examiner or the question maker has played big time because the amount here is in cras the outstanding units is not in crit you can directly divide this by 20 wrong 20 lakh units if you convert that in crumb.2 to want to see come see here see if I say can I say 100 lakhs is equal to 1 cr right so for 20 lakhs how many cr2 cr okay okay okay divide by2 will give me nav per unit.

[00:52:48]How much?

[00:52:53]Very good. Others everyone. Yes. The N per unit will be 272.

[00:53:08]Okay. 7625 per unit.

[00:53:13]All righty. With this we complete this question as well. Any doubts anyone? Are you properly copying the notes guys?

[00:53:24]Great. Everybody on the right track done correct.

[00:53:52]Uh, Anerud Anerudan Satish please check your answer buddy.

[00:54:13]Sure.

[00:54:25]Next is the new concept. So this was concept number six. Now we will write down concept number seven and mark it as important because this concept is going to go ahead to a lot of other things as well. So write down concept number seven returns of or from openended fund returns.

[00:55:14]of or from open-ended fund.

[00:55:20]Mark it as very important. Let's start now.

[00:55:28]Let's take an example. Let's take an example. Let's take Mr. uh Anerudhan Satish. Let's take him in our example. Hello Mr. Anerudhan Shatish.

[00:55:41]Here we need to calculate return for our investor.

[00:55:54]Calculate return for a investor Aniran. Okay.

[00:56:04]Now what is the position of the investor paid on 1st June?

[00:56:14]On 1st June Anerudhan purchase a few units. Anerudhan purchased a few units when the nav was at the rate rupees 6,300 per unit. When the nav was 6,300 per unit. Okay sir.

[00:56:35]On 15th of July on 15th of July are Aif mutual fund distributed.

[00:56:55]Okay just one clarification. This is return or or from open-ended fund to the investor to the or for the investor. Huh guys just keep this thing in mind to the or for the investor.

[00:57:12]So AI if mutual fund distributed dividend of rupees 500 per unit of rupees 500 per unit. Then on 31st of July, on 31st of July the NAV was at the rate rupees 7,000 per unit.

[00:58:03]calculate return of Mr. I'm sorry of Mr. Anerut on 31st of July. Can you do that everyone?

[00:58:26]Give it a try. Come on. We have to calculate the return for our investor Mr. Anerut.

[00:58:37]For all those wondering what is this?

[00:58:39]This is a mango juice. H nothing else.

[00:59:09]Ch. Let's see. Okay.

[00:59:16]Anerud has given himself the answer and his answer is absolutely correct.

[00:59:21]19.0476%.

[00:59:24]Now see how did he do the calculation.

[00:59:27]Let's try and understand.

[00:59:30]So this was our example. Here we go with the solution.

[00:59:35]Okay.

[00:59:40]Here we go with the solution.

[00:59:51]Pay attention now guys.

[00:59:56]Now what is the nap at which I invested?

[01:00:00]Can I say at the rate 6,300 per unit? So on 1st June on 1st June 6,300 per unit is the NAP at which I invested. This is the outflow from my pack pocket.

[01:00:20]Okay. Then on 15th July, can I say Mr. Anerud received rupees 500 in his bank account received rupees 500 as dividend in bank account in his bank account.

[01:00:45]Correct.

[01:00:47]Okay. Then on 31st July, can I say he sold the units at the rate 7,000?

[01:01:00]It's as good as that. Sold units at the rate rs 7,000 per unit which will become my closing net. And this becomes my opening now. All right.

[01:01:22]So what is happening?

[01:01:26]Can I say from 7,000? Hello from 7,000 per unit to 6,300 or rather from 6,300 to 7,000.

[01:01:42]Can I say this is a case of capital appreciation?

[01:01:49]This is a case of capital appreciation and this 500 is the additional income of dividend. So how will we calculate the return for Mr. Anerod guys?

[01:02:02]It will be the return will be 7,000 is what we have made. 6,300 is what we had invested plus 500 is the dividend upon 6,300 is the investment into 100. Tell me the returns earned.

[01:02:27]Tell me the returns earned. Well, it will be 19.04 76%.

[01:02:36]Right. Perfect. Correct. So two things that the investor has made a capital appreciation a capital appreciation and a income from dividend and a income from dividend. Now if I have to write this in terms of a formula how will I write it guys? Come on tell me if I want to write this as a formula it will be what? So returns for an investor for a open-ended file will be equal to correct closing nav minus opening nap. have right plus dividend slash other income the whole divide by opening nav.

[01:04:03]Got it everyone?

[01:04:07]What is this opening nav? Basically this is nav at the time of purchase.

[01:04:24]This is your capital appreciation.

[01:04:28]Please guys write it down. This formula is going to be used extensively.

[01:04:34]So this is our capital appreciation.

[01:04:37]So always whenever we have to calculate the return for an investor in case of an open-ended fund, this is the formula that we will religiously use. This is the formula that we will religiously use. Okay sir. Okay.

[01:04:59]Done.

[01:05:06]Done.

[01:05:08]Return in percentage should be four decimals. No, two decimals is also okay.

[01:05:13]Here I have written four but that's fine. Two decimals is also okay guys.

[01:05:17]Have you written this?

[01:05:25]Right. On that note, now we are going to start with a question and the question will be question number 10 from our textbook. Question number 10 from our textbook.

[01:05:49]So a mutual fund had a net asset value of 20 at the beginning of the month made income and capital gain distribution of 0.0375 and 0.03 03 per unit respectively during the month and then ended the month with a net asset value of 20.06.

[01:06:16]Please calculate the monthly return for the investor. Come on guys, take 2 minutes and give me the answer.

[01:06:28]Mhm.

[01:06:30]Okay. So, here we go. Here we go with the solution. Pay attention guys. So net asset value at the beginning is given. So can I say this is like our opening nav.

[01:06:56]We will write here opening N which is rupees 20 per unit.

[01:07:06]20 per unit.

[01:07:08]Okay. Then income and capital gain distribution 0375 and 03. Let's write down.

[01:07:22]So income and capital gain 0375 03. So rupees 0375 per unit plus rupees 03 per unit. Right? Right.

[01:07:48]So this will be how much?

[01:07:53]Correct. Rupees.

[01:07:56]0675.

[01:08:03]0675.

[01:08:09]Then there is a month end nav of 20.06.

[01:08:15]So we will call this as a closing nap and that is 20.06 06 per unit, right? Tell me what is going to be the return for the investor.

[01:08:38]Therefore, right, return for investor I have very clearly told you all. How do you calculate the return for the investor? It is going to be the capital appreciation which we have to check first. Can I say this is my capital appreciation closing nav minus opening nav. So we will write here we will write here closing nav minus opening n. All right. plus any dividend or income upon opening 10. What is the closing lab? 20.06. 06 we invested 20 dividend is 0675 again opening is 20 all right return for the investor will be guys correct this will be 6375% got it everyone yes 6375 5% done sir.

[01:10:33]Now one more thing what they have asked is this. See they have asked for something called as a monthly return at the beginning of the month during the month they received something and then ended the month. So can I say all of this situation is going on for the monthly basis. So can I say my return for investor that we have received here is per month is per month. Am I right everyone? Yes sir. Now if this is per month, what would be the return on an annual basis? What would be the return on an annual basis? Can I say if you multiply this by 12, we will get the annual return? Am I right? Right sir.

[01:11:26]Right. So this basically this per month is basically called as HPR holding period return. And if I multiply this by 12 months I will get a R.

[01:11:47]I will get a r 6375 into 12 7 65% perom right okay now the next discussion is going to be on this topic what HPR and AR so far returns from open-ended fund to the investor are we clear with writing writing now.

[01:12:23]Now, no, no. I'll just give you a small example.

[01:12:33]I'll just give you a small example and we'll start.

[01:12:37]Suppose on 1st June.

[01:12:43]Okay. On 1st June, on 1st June, S Swadi purchased mutual fund.

[01:12:55]Swadi purchased mutual fund at NAV of Rups 1,000 per unit. Swadi purchased a mutual fund at NAV of,000 per unit.

[01:13:12]On 30th of June, do you know what has happened? On 30th of June, the NAV is rupees 1,200 per unit.

[01:13:28]I want each one of you to calculate for me the return the return. Sir, what about the dividend? No dividend paid. No dividend declared. No dividend paid. So here we will say that return of Swadi will be how much? Return of Swadi will be how much? Correct. We will say 1200 -,000 upon 1,000 into 100 correct will be equal to 20%.

[01:14:05]And can I say this return will be for the month. The return will be for the month. So this is 20% per month. 20% per month guys. Any return that we calculate by default this is called as HPR.

[01:14:31]So what is HPR?

[01:14:33]Holding period return.

[01:14:40]Holding period return.

[01:14:44]Okay sir. Yes.

[01:14:51]Okay. So this is called as holding period. Now this holding period return for can be any month, any year, any days, it can be for any duration. So what we call as HPR. So if in our example HPR is 20%, tell me what will be the AR? So 20% is for 1 month. What will be for 12 months?

[01:15:18]Well well it will be what? 20 into 12 upon 1 which is HPR into 12 / 1. 1 is holding period. Can I say we held it for 1 month holding period? So AR formula will be HPR into 12 upon HP upon HP. Gotcha everybody.

[01:15:49]Yes sir. Sure.

[01:15:52]Please write this down and we will write down the format or the formula for HPR and AR as well. Quickly copy this down.

[01:16:28]So let's start.

[01:16:31]Here we go.

[01:16:34]Right on heading HPR holding period return and AR annual return.

[01:17:03]Okay.

[01:17:07]So let's write down HPR is equal to return earned.

[01:17:25]HPR is equal to just a moment.

[01:17:36]return earned by the investor for a given period.

[01:17:52]for a given period.

[01:18:00]It could be this could be any period.

[01:18:03]Huh? It could be any given period.

[01:18:18]That is 1 day, 15 days, 8 months, 13 months.

[01:18:35]3.5 years etc. It can be anything.

[01:18:42]Okay.

[01:18:44]So, and HP is called as the holding period.

[01:18:52]Holding period.

[01:19:06]Next.

[01:19:12]Next. Write down a ar.

[01:19:18]A r is equal to a r. What is a r? A R is annual return is equal to holding period return upon HP. Holding period multiply by 12 months or 365 days, 52 weeks or 1 year upon months, days I mean holding period days, months, whatever is the case, weeks or years. As the case may be. Okay. As the case may be.

[01:20:26]Have you written everyone? Have you written this?

[01:20:30]Good.

[01:20:44]Ch. Now I will give you a small example.

[01:20:48]You have to answer that and then logically HPR and AR would be clear to you. Right on. Example say on 1st June 1st June say 2027 NAV at the beginning is rupees 600 per unit.

[01:21:19]Okay.

[01:21:21]And on 31st August 2028, NAV is equal to rupees 900 per unit.

[01:21:35]Your time starts now. Calculate HPR and AR. Your time starts now. Come on everyone.

[01:21:44]This is the information given to you. No dividend.

[01:21:49]just opening nav ending nav 600 900 you have to calculate the HPR and AR.

[01:21:58]First thing that you should always do is calculate the HP the holding period. So we will write here guys we will write here holding period is equal to what will be the holding period? Tell me can I say it will be 1st June 27 to 31st August 28.

[01:22:25]So one full year and then June July August. So this will be 15 months. So can I say the idea the info is given in terms of months guys? Info is given in terms of months fair. Now first we will calculate the holding period return which is a simple 900 - 600 upon 600 into 100 is equal to 50%.

[01:22:57]This is your HPR. How do you convert this into a annual return?

[01:23:02]Right? It will be HPR multiply by 12 months upon holding period which is equal to 15 months. So if the holding period is in months we will write here 12 months. If the holding period is in days you'll write here days whatever it is.

[01:23:26]So HPR into 12 or 15. What is the HPR?

[01:23:38]Correct. The HPR is 50 into 12 upon 15. Okay. The annual return is 40% perom or annual you can write down 40% perom.

[01:23:55]Right?

[01:23:56]Are we understanding everyone?

[01:24:00]Any doubts?

[01:24:08]Sure. On that note, you will get question number 14 as your homework.

[01:24:20]Question number 14 as your homework. So, we started with question number 15. Then we did uh the concept of come dividend x dividend.

[01:24:32]Then we did uh sum again from module.

[01:24:38]Then we did the sums on holding period return annual return.

[01:24:44]Question 14 will be your homework.

[01:24:47]All right. Okay. Then we did the returns for an investor for a open-ended fund.

[01:24:53]So I hope we are all clear till here.

[01:24:56]Okay. Sure. Done. I think that's it for today. So the first three sessions are done. The first three breather sessions are done. Can I say the vibe is matching guys? Everyone vibe check. Please give me a vibe check.

[01:25:11]Say a yes or a yes or a thumbs up. Okay.

[01:25:17]from tomorrow it will be not on the YouTube but it will be on the application which you have received on registration. So all the students who have registered please uh uh download the app and you will get everything from the app. In case you want to ask me any doubts then in that case you can just drop me a WhatsApp on this number and I will be happy to help you for any doubts that you may have. Thank you so much.

[01:25:46]Thank you so much. Clear. Great. Perfect vibe. Butter smooth. Awesome. Great.

[01:25:51]From tomorrow on the app, 8:30 p.m. in the evening. Thank you so much. Take care. Keep smiling.

[01:26:01]Bye-bye.

[01:26:07]Okay.

[01:26:09]Yeah. So, by default, the first three sessions will be on YouTube. You can watch it anytime you want to. And from fourth session, we'll do it from the end. Yes.

[01:26:21]Done.

[01:26:23]Lakshmi, why are you not answering in the comments? H Yeah, tomorrow will be 8:30 p.m. Brother sir, what is Aasta Vista?

[01:26:44]means you guys are very good.

[01:26:48]You guys are >> Yes, good night. And the same way we'll continue all the sessions and hopefully have the best of the time. Are you feeling now confident for this subject?

[01:27:17]If if this is how everything goes, do you feel that yes, you can score the maximum in this? That's the thing that you have joined this class for. That should be your end intent, guys. All right. Sure. Bye-bye. Keep working hard, guys. Thank you. Do the homework and come. Any doubts, we'll discuss it tomorrow. Bye. 16 also is your homework.

[01:27:37]14 also is your homework.

[01:27:39]16 also is your home.

[01:27:44]>> Bye-bye.

[01:27:46]Sure. Thank you.

[01:27:55]>> What is index as in acha? Index fund. Okay. Okay. Okay. That I'll explain. index will be done in more detail when you are doing portfolio management. Don't worry brother. Okay.

[01:28:11]Also uh one more thing now as we move on we'll also try to connect you with the practical world with the practical financial world. So you'll get some more idea and you'll be practically able to apply all of that in your studying understanding and examinations also. So all of that will come gradually. So index index fund everything.

[01:28:33]Shoubraatri in Canada for good night.

[01:28:36]Okay. So in Hindi also we say Shubraatri only.

[01:28:42]Okay Atish that's great to know.