Mutual Funds

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FN5206 Investment Management

Term Paper:

Analysis of investment strategies of the mutual funds and their influence on funds’ performance

on the example of
Centras Securities Investment Company

Instructor: M Mujibul Haque, Ph.D.

Prepared by: Jumasheva Sulushash, 20070299 Sergey Savinykh, 20074290

Fall 2009

Table of Contents
1.Investment opportunities in Kazakhstan5
2.Mutual funds in the world6
2.1Definitions and Overview6
2.2Types of mutual funds7
2.3Advantages of mutual funds7
2.4Caveats of Investing in Mutual Funds8
3.Share investment (mutual) funds in Kazakhstan9
3.1MF activities overview9
3.2Principles of functioning of the PIF10
3.3Statistical Variables which reflects the risk11
4.JSC "Centras Securities" Investment Company13
4.1Company info13
4.2Investment fund “Treasury”13
4.3Investment fund “Native Lands”17
4.4Investment fund “Global Markets”18
Appendix 120
“Treasury” – KASE Index Performance20
“Treasury” – KASE Index Volatility21
“Treasury” – KASE Index Linear Regression22
“Treasury” – KASE Index Data File23
Appendix 224
“Native Lands” – S&P 500 Index Performance24
“Native Lands” – S&P 500 Index Volatility25
“Native Lands” – S&P 500 Linear Regression26
“Native Lands” – S&P 500 Data File27
Appendix 328
“Global Markets” – S&P 500 Performance28
“Global Markets” – S&P 500 Volatility29
“Global Markets” – S&P 500 Linear Regression30
“Global Markets” – S&P 500 Data File31
Appendix 432
Comparison Table32
Appendix 533
KASE, MICEX and S&P 500 Indexes comparison33


We would like to express our gratitude to all those who gave us the possibility to write this term paper. Especially we want to thank our faculty supervisor Dr. Mujibul Haque, professor from Bang College of Business, whose help, stimulating suggestions and encouragement helped us a lot in writing of this paper.


In our work we would like to consider the investment opportunities of an individual unprofessional investor in Kazakhstan. Further we concentrate on the investments in a mutual fund and analysis of the mutual funds activity and profitability with different investment strategies.

The information for this paper was based on literature review of our textbook on investments, on intensive use of internet materials and publicly available reports of the mutual fund and indexes. The basic method used in our research is a comparison of the price changes of the mutual fund share and the dynamics in stock indexes. Analysis is focused on Kazakhstan mutual funds performance and benchmark index. Those funds have different investment strategies, so we consider S&P 500 Index and MICEX (Moscow Interbank Currency Exchange) as well. In our research we base on the investment strategies which were declared by the mutual funds. In case the real investment portfolios are not created based on the declared strategies, our analysis may be less representative.

As for the significance of the issues, it should be said that in recent years Kazakhstan citizens experience a significant growth in their families’ wealth. They started to look for a broader scope of investment opportunities and they would like to create an optimal portfolio. That’s why they should be familiar with the investment opportunities existing on the local and global markets.

Investment opportunities in Kazakhstan

The money stored in "stock", depreciates as it becomes "the dead" capital. The basic way to force money to work is investing them. "Investment consists in putting up money today and...
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