Scratch of Fund Accounting! - what a regular investment looks like

 

In the world of investments a fund manager can use a number of instruments to invest the client's funds, here are a few-

 Preferences by popularity and exposure -

1. Equity (Shares)                                                 

2. Mutual Fund/ETF

3. Bonds

4. Derivatives (Futures & Options)

Will start with Equity investment!

When we buy a company's stock, we become a shareholder of that company because we have ownership (or a share) in it. So whenever we trade any stock, the broker will send us the contract note after the market close which contains all the stocks bought by us along with the quantity, cost and price

Take a look below - it is a contract note and see the highlighted figures-

First you see the name of the stock, followed by the transaction type (buy or sell), volume, gross price, brokerage per share and net price before taxes. And lastly we can see the taxes imposed like STT and GST etc.

So here we need to understand two things- Gross Cost and Net Cost, let's see it with an example-

Stock Name	BCG
Quantity Bought	1,000.00	A
Gross / Market Price Per share	100.50	B
Gross Trade Value	100,500.00	C = A x B
Total Brokerage	201.00	D
Total Taxes	50.25	E
Net Trade Value	100,751.25	F=C+D+E
Net Cost Per Share	100.75	G=F/A

See👇 an example of a Portfolio Report (so here we are showing a sample portfolio of an END or CHILD account)

So in this 👆sample report we can see the status of an investment basket - investment wise. To understand in detail read next post "VIEW! PORTFOLIO REPORT"