INVESTMENT FUNDS

• Mutual fund (MF)

      A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. 

 Mutual funds give small or individual investors access to diversified, professionally managed portfolios at a low price.

Hedge Fund

                Hedge funds are alternative investments using pooled funds that employ different strategies to earn active return, or alpha, for their investors. It is a special type of Mutual Fund meant for HNI (High Net worth Individual) who want high risk high return. Minimum investment per person is ₹1 crore.

• ETF: Exchange Traded Funds

ETFs are essentially index funds that are listed and traded on stocks exchanges just like regular shares. ETFs are in many ways similar to mutual funds; however, they are listed on exchanges and ETF shares trade throughout the day just like ordinary stock.

BHARAT-22:

Bharat 22 is an ETF that will track the performance of 22 stocks, which the government plans disinvest. The B22 will span six sectors, such as basic materials, energy, finance, FMCG, industrials and utilities. The B22 ETF will be managed by ICICI Prudential AMC while Asia Index will be the index provider.

Alternative investment funds (AIF)

Alternative Investment Fund comprises pooled investment funds which invest in venture capital, private equity, hedge funds, managed futures, etc. In simpler terms, an AIF refers to an investment which differs from conventional investment avenues such as stocks, debt securities, etc. 

Alternative Investment Fund is described under Regulation 2(1)(b) of the Regulation Act, 2012 of Securities and Exchange Board of India (SEBI). AIF can be established in the form of a company or a corporate body or a trust or a Limited Liability Partnership (LLP).

Generally, high net worth individuals and institutions invest in Alternative Investment Funds as it requires a high investment amount, unlike Mutual Funds.

Disinvestment in India is a policy of the Government of India, wherein the Government liquidates its assets in the Public sector Enterprises partially or fully.

Disinvestment is a tool for public sector reforms and part of de-regulation policy. India had all major industries under government sector. From 1991 LPG onwards disinvestment has been a major process of government giving way to the private sector in the economy.

The Department of Disinvestment was set up as a separate Department on 10th December 1999 and was later renamed as Ministry of Disinvestment form 6th September 2001. From 27th May 2004, the Department of Disinvestment is one of the Departments under the Ministry of Finance.

The Department of Disinvestment has been renamed as Department of Investment and Public Asset Management (DIPAM) from 14th April 2016.

1. As per the present Allocation of Business rules, the mandate of the Department is as follows:
   1. All matters relating to management of Central Government investments in equity including disinvestment of equity in Central Public Sector Undertakings.
   2. All matters relating to sale of Central Government equity through offer for sale or private placement or any other mode in the erstwhile Central Public Sector Undertakings.

Note: All other post disinvestment matters, including those relating to and arising out of the exercise of Call option by the Strategic Partner in the erstwhile Central Public Sector Undertakings, shall continue to be handled by the administrative Ministry or Department concerned, where necessary, in consultation with the Department of Investment and Public Asset Management (DIPAM).

2. Decisions on the recommendations of Administrative Ministries, NITI Aayog, etc. for disinvestment including strategic disinvestment.
3. All matters related to Independent External Monitor (s) for disinvestment and public asset management.
   1. Decisions in matters relating to Central Public Sector Undertakings for purposes of Government investment in equity like capital restructuring, bonus, dividends, disinvestment of government equity and other related issues.
   2. Advise the Government in matters of financial restructuring of the Central Public Sector Enterprises and for attracting investment in the said Enterprises through capital market.
4. The Unit Trust of India Act, 1963 (52 of 1963) along with subjects relating to Specified Undertaking of the Unit Trust of India (SUUTI).

Strategic Disinvestment

The Department of Investment and Public Asset Management (DIPAM) which comes under the Finance Ministry defines Strategic disinvestment as follows: “Strategic disinvestment would imply the sale of a substantial portion of the Government shareholding of a central public sector enterprises (CPSE) of up to 50%, or such higher percentage as the competent authority may determine, along with transfer of management control.”

The Cabinet Committee on Economic Affairs has approved strategic disinvestment of various CPSEs. Some of the include Bharat Petroleum Corporation Ltd. Air India and its five subsidiaries and one JV Shipping Corporation of India Ltd. Container Corporation of India Ltd. Hindustan Prefab Limited Pawan Hans Ltd. Scooters India Limited Bharat Pumps & Compressors Ltd Bharat Earth Movers Ltd Cement Corporation of India Ltd Alloy Steel Plant, Durgapur; Salem Steel Plant; Bhadrawati units of SAIL In.