On 1 st April, an open ended scheme of mutual fund had 300 lakh units outstanding with Net Assets Value (NAV) of 18.75. At the end of April, it…
CA Final · Advanced Financial Management · MTP · November 2024
On 1 st April, an open ended scheme of mutual fund had 300 lakh units outstanding with Net Assets Value (NAV) of 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: in lakh 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 30 th June.
Suggested Answer and Working Notes:
Calculation of Income available for Distribution Units (Lakh) Per Unit (₹) Total (₹ In lakh) Income from April 300 0.0765 22.9500 Add: Dividend equalization collected on issue 6 0.0765 0.4590 306 0.0765 23.4090 Add: Income from May 0.1125 34.4250 306 0.1890 57.8340 Less: Dividend equalization paid on repurchase 3 0.1890 (0.5670) 303 0.1890 57.2670 Add: Income from June 0.1500 45.4500 303 0.3390 102.7170 Less: Dividend Paid 0.2373 (71.9019) 303 0.1017 30.8151 Calculation of Issue Price at the end of April ₹ Opening NAV 18.750 Add: Entry Load 2% of 18.750 0.375 19.125 Add: Dividend Equalization paid on Issue Price 0.0765 19.2015 Calculation of Repurchase Price at the end of May ₹ Opening NAV 18.750 Less: Exit Load 2% of 18.750 (0.375) 18.375 Add: Dividend Equalization paid on Issue Price 0.1890 18.564 Closing NAV ₹ (Lakh) Opening Net Asset Value (₹ 18.75 × 300) 5625.0000 Portfolio Value Appreciation 425.4700 Issue of Fresh Units (6 × 19.2015) 115.2090 Income Received (22.950 + 34.425 + 45.450) 102.8250 6268.504 Less: Units repurchased (3 × 18.564) -55.692 (-127.5939) Income Distributed -71.9019 Closing Net Asset Value 6140.9101 Closing Units (300 + 6 – 3) lakh ∴ Closing NAV as on 30 th June = 6140.9101 lakh / 303 lakh = 20.2670
Topics: Mutual Fund
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