Examples of Power Essay Example | Topics and Well Written Essays - 1250 words

Examples of Power - Essay Example Different forms of power have been described along with personal experiences. An interview with a CEO of a company has been described. In the end, some suggestions have been given as to how leaders and managers can exercise power appropriately. Power enables the leader to define out his position within the organization and his relationship with the subordinates (Papa, Daniels & Spiker, 2008). If power is not recognized and used properly, that results in anarchy with the organization that not only destroys leader-member relationship but also results in imperfect organizational outcomes. Power is not a central idea for leaders only, but the fact is that every position in the organization has some power with which it controls some of the organizational goals and makes effective decisions (Papa, Daniels & Spiker, 2008). Bal et al. (2008, p.12) have identified three important ways in which power influences the organization. According to them, power is used to promote one’s own agenda, promote someone else’s agenda, or to promote the organization’s agenda. Power promotes one’s own agenda in a way that the person gives priority to his tasks; he tries to impose his own rules and regulations; and, he takes measures to look after his position. Power also promotes another person’s agenda when the person in power introduces someone in the network or refers him to somebody. Power is also used to promote organizational agenda through measures taken to improve communication and relationship among employees and with leaders. This power is not based on self-interests, and focuses on improving employee development through improving inter-personal relationships at workplace. Complexities in power also have a lot of influence in leader-member relationships (Papa, Daniels & Spiker, 2008). According to Sweeney and McFarlin (2001), complexities arise when the person in power exhibits political behavior like trying to attempt personal gains by violating

Determinants of Mutual Fund Growth in Pakistan

Determinants of Mutual Fund Growth in Pakistan This study is actually about the mutual fund growth and the determinants which are influencing on the growth of these funds. We ask whether the growth of funds is influences by the management fee, family proportion and the expense ratio or not. How much these variables influenced the growth of funds. We further check out the relation of the family assets and the return on the funds with the performance of the funds. Investors are paying the charges to control the funds and for the growth of the funds in the shape of management fee and the administrative charges. We study the behavior and the output of the funds from the duration of 2005-2009. We selected the funds which are listed in KSE. The funds are selected which are in the family proportions because of the nature of regression model which is used for the calculation of the effect of determinants on the growth of the funds. We use two models for the interpretation of the data. These are fixed effect model and cross section model. Through these models we elaborate the effects of different factors on the growth of these funds. We focus on the management fee for checking the efficiency of the funds management. Whether these are contributing in the growth of the funds or not, if not then these fee is only for the benefit of funds management INTRODUCTION In Pakistan the mutual fund industry handles a significant portion of the assets of individual investors. Basically there are many factors which can affects on the growth of the mutual fund. In these determinants of the mutual funds which can affect the growth of the mutual fund we are focusing on the management fee, the main focus is on the charging of the management fee and its impact on the growth. Whether it is beneficial for the growth or not? Along with this we are determining some other major determinants of which can influence on the growth of these funds in Pakistan. Compensation to managers is primarily in the form of a Management fee. With few exceptions, Management fees are charged as a percentage of the assets under management rather than on the basis of performance. It is therefore in the interest of management to grow the total assets in the fund and in the associated fund family. One tool that managers may use to grow funds is the Management fee. The fees, which are l imited to1% to 3% per year as Management fee, are used to cover administrative costs. This paper studies whether or not the charging of a Management fee support the investors by growing the worth of mutual funds family along with that of some other determinants. Next we checked that the charging of Management fee leads to greater cash inflow for the funds which charge them. We focus on various mutual funds existing in the Karachi Stock Exchange and listed there, in order to control for the variety of commission payment schemes associated with management fee charging funds that are now available to shareholders and are in the group of families charging Management fee. LITERATURE REVIEW These are some of the review from the experts and the researchers. Academic opinion on mutual fund fees is generally critical. Bogle, points out that the average cost of owning mutual funds has risen over 100 percent in the last sixty years. Freeman and Brown contend mutual fund advisory fees alone are excessively high. In their view the mutual fund industry is dominated by conflicts of interest where the mutual fund boards fail to negotiate arms-length management contracts with asset managers. In their view asset managers are over compensated for the services that they provide. Similarly Ang, Chen and Lin argue that the primary benefit that managers can provide to the shareholders is the reduction of expenses. The reason is that management has more control over expenses than over any other aspect of the return to the shareholders. Therefore, if managers are not working to reduce expenses they are failing to carry out their primary duty to the shareholders. Golec found that fund managers are compensated primarily on the basis of a percentage of the assets under management. That compensation scheme provides fund managers with a strong incentive to grow fund assets regardless of the degree to which such growth is consistent with shareholder welfare. Collins, along with Livingston and ONeal (1998) and ONeal (1999) argue that some investors pay to receive professional investment advice and assistance in the purchase of mutual funds. Essentially they argue that brokers provide some combination of resolving asymmetric information for investors and providing a needed service in completing and maintaining the required records in order to complete the investing process. We closely examine the issue of whether brokers primarily resolve asymmetric information or primarily provide investors with record completion and maintenance services. One way to grow the assets is to well manage the fund by the fund management of that varies funds. Management f ees provide a source of funds for controlling and managing the funds. Naim Sipra (2008) one of the interesting things to note is the low correlation between the funds and the market portfolio. In US studies the correlation between the market and mutual funds is often 0.9 or above. A high correlation with the market is an indication of a high degree of diversification. The low correlation in the Pakistani case suggests that the mutual funds are not doing a very good job of diversification. The low correlation and also the low betas are probably due to inclusion of fixed income securities such as the Term Finance Certificates (TFCs) in the portfolios of these funds. Since the composition of the funds is not publicly known therefore it is not possible to analyze this issue any further. Ali S M, Malik A S (2006) A Capital markets play a vital role in the economic development of a country. It is now widely accepted that there is a direct correlation between economic growth and the development of the financial sector. Mutual funds are considered to be an imp ortant source of injecting liquidity into the capital markets. A well established financial intermediation system facilitates the economic activity by mobilizing domestic as well as foreign savings. Muhammad Akbar Saeed (2004) during the last two years, mutual fund sector has more than tripled in size to Rs. 112 billion (as of 31-Dec-04). The industry players are predicting that the business is likely to grow by 200 percent over the next five years. The success of the industry will lie in several factors, one of which will be the role of regulators and their efforts to continuously evolve the code of corporate governance for the mutual fund industry. Moeen Cheema and Sikandar A. shah (2006) Mutual funds are becoming vehicles of securities investments most favored by the general public worldwide. Whereas, this trend is more pronounced in the developed securities markets of the United States of America and Europe, mutual funds are increasingly gaining the public attention in the developing economies as well. Pakistan is not an exception to this global trend and even though mutual funds form a comparatively small segment of the securities markets, they have grown phenomenally over the last few years. According to the Mutual Fund Association of Pakistan (MUFAP), whereas mutual funds may not shield investors from the risks associated with overall market failure, the ability to diversify that they provide may reassure public investors as regards the failure of individual companies and hence make them less wary of insider opportunism in any given corporation. We similarly consult some of the related articles for this purpose, which can be seen from the references. We also consult some of the conflicting matters with the course instructor. In summary, Management fee is basically for the controlling of the mutual funds and for the growing purpose of the funds. But is it working well for the growth of the mutual funds which funds are being charging this fee. HYPOTHESES AND METHODOLOGY This paper studies whether the shareholders income and their wealth increase from the growth of the mutual funds through the charging of Management fees. The main focus on the Management Fee but there are some other determinants like family proportion, expense ratio, return through sharp ratio and assets turnover in that specific duration which we selected for the research purpose. There are a number of ways in which investors could enjoy by the growing of wealth from funds which charge this fee. Since the fee is used for administrative expenses. It could aid investors by making them aware of high quality managed funds that might otherwise be invisible to them. There are several possible examples of funds where this might apply. First, funds charging this management fee lead the higher total returns. Funds with greater total returns would benefit investors in that, if the superior performance was persistent, investors would have a higher terminal wealth from investing in these funds than they would have from investing in other funds. A fee showing the existence superior total returns would be of great of interest to investors. The null hypothesis: Ho: There is no difference between the total returns of mutual funds that charge the Management fee and those that do not charge the Management fee will be tested. Second, the Management fee might be a signal to investors of a greater risk adjusted rate of return. A greater risk adjusted return would imply that investors could earn superior returns with less chance of loss with respect to other portfolios offering the same level of return. The second null hypothesis to be tested is: Ho: There is no difference in risk adjusted returns between the risk adjusted return of mutual funds that charge the Management fee and those that do not charge the Management fee. 2nd hypothesis will be tested using Sharpe Ratio. It needs to be noted that these null hypotheses could be rejected either because the funds charging the Management fee over perform or because they under perform. If there is persistent over performance, the over performance is in the interest of the investors. However, persistent under performance would mean that the fee being paid by the investors is being used to let them know that these mutual funds are not performing well that will leave the investors with less terminal wealth. Such a result would be consistent with the view that Management fees are inconsistent with shareholders income growth. Third, the funds charging the Management fee could be the funds that have lower expense ratios. The numerator of the expense ratio includes all of the operating costs of managing the fund; including the management fee and other administrative costs as well as all the expenses. It may be that after the Management fee is removed from the expense ratio the fund has lower expenses than other funds. Such a result would support the idea that the fee itself is merely a substitute for other costs and that the investor in such a fund is no worse off, and could be better off than the investor in a fund that does not have the fee. The null hypothesis to be tested is: Ho: There is no difference of the expense ratios of the funds on the growth of the mutual funds. 3rd hypothesis will be tested after subtracting the Management fee from the expense ratio. The null hypothesis could be rejected because the funds charging the fee have lower expense ratios or because the funds charging the fee have greater expense ratios. In the first case the management fee would be in the interests of shareholders and in the second case the fee would not be in the interests of shareholders. If it is found that the management fee is not supporting the growth of the mutual funds of shareholders, the other alternative is that the fee is in the favor of the fund management. It would be in the interest of fund management to charge the management fee if the existence of the fee led to faster asset growth than could otherwise be expected. Management desires faster asset growth because of the manner in which management is compensated. Fourth, managers might be using management fees to grow funds more rapidly than they would otherwise be growing. The growth of the fund from time t to t+1 is defined as: Gi = (Assetst Assetst -1(1+R))/Assetst -1 (1)†¦Ã¢â‚¬ ¦Equation Where Gi is the growth rate in the assets under management by fund i from time t-1 to time t. Assetst are the net assets under management at time t. Since the assets under management may grow either due to new sales or returns, equation 1 eliminates the growth that is due to returns. For all of the funds in the study, the management fee is based on the net assets under management which may provide a managerial incentive to grow the fund as rapidly as possible. Ho: The growth rate of mutual funds that charge management fee is higher as compare to the funds which are not charging the fee. We will test whether the funds that charge the fees actually are growing faster using a regression model that controls for risk adjusted return, asset turnover rate, the relative size of the mutual fund within a family of funds, the expense ratio of the fund other than the management fee and the level of the management fee. Gi = ÃŽ ² 0 + ÃŽ ² 1RARi + ÃŽ ² 2ATi + ÃŽ ² 3ASSETi + ÃŽ ² 4FAMPROi + ÃŽ ² 5ERi + ÃŽ ² 6FEEi + ÃŽ ² i †¦2) Equation Gi is the growth due to new investment in funds i from previous year t to current year t+1. Growth is defined by equation 1. This sign (?) Measures the sensitivity of the growth rate of the mutual fund to the specified factor in each case. An expected positive sign means that the growth rate is expected to respond positively to increases in the variable. An expected negative sign means that the growth rate is expected to respond negatively to increases in the variable. The expected sign is specified for each of the control variables. RARi is the risk adjusted returns on fund i from year t to t+1, estimated by using the Sharpe Ratio. In accordance with past findings, this control variable is hypothesized to have a positive sign and does take a positive sign. ATi is the asset turnover for fund i which is measured through the formula of Net Income divided by the Total Assets. Turnover is a measure of investing activity. The greater the turnover, the greater the cost of operating the fund. Holding all else equal, the greater the cost of operating the fund the lower the growth in the fund. This variable is hypothesized to have a negative sign and does have a negative sign. ASSETi is the total assets of fund i at time t. The larger a fund, generally, the older the fund is so that assets serve as a proxy for the age of the fund. The older a fund, the more well known the fund is to the investing public and the easier it will be to sell the fund. Assets are expected to and do have a positive relation with growth. FAMPROi is the proportion of the mutual fund family assets made up by fund i. The larger the proportion of the family assets in the fund the slower will be the growth, as management efforts will be directed primarily at the newer, smaller funds. This variable is expected to have a negative sign and generally has a negative sign. ERi is the expense ratio of fund i , less the management fee from all the expenses. The expense ratio includes all of the costs that the management company charges to the fund including the management fee, trading costs, and any other expenses. Since the purpose of the test is to isolate the effect of the management fee, that fee is subtracted from the expense ratio. The greater the expense ratio, the lower the growth. Investors should prefer a lower cost fund to a higher cost fund. The variable generally has the expected negative sign. FEEi is the level of the Management fee. For the vast majority of the funds in the study, this variable will be charged by 1% to 3%. It is expected that the null hypothesis will be rejected and that this variable will have a positive sign which is generally the case. The regression model (Equation 2) is estimated on an annual basis for the years 2004 through 2009 for all funds that have all required data available. Equity and fixed income funds are examined separately. A positive and significant sign on the FEE variable will lead to a rejection of the null hypothesis and will be consistent with the idea that the Management fee is used by management to increase growth in assets. There are two economic rationales that apply to the imposition of the Management fee on mutual fund investors. The first is that investors are the primary beneficiaries. The second is that fund management is the primary beneficiary of the fee. The major contribution of this paper is to determine whether the facts are more consistent with the investors or the managers being the beneficiaries for mutual funds. THE DATA All of the data are taken for the years 2004 through 2009. Since 2004 is the first year and lagged data is needed, the results are presented for all funds for which all data was available for 2005 through 2009. The data are summarized in the table form and data is regarding the equity funds. As far as the collection of the data is concerned so we consult many sources for the collection of the data. Mainly we collect it from KSE. From where the full data was not available and after that we consult the Business recorder, Statistical Bulletin of Pakistan [Federal Bureau of Statistics (2005)] for 2005-2009 and SBP for the collection of the financial reports and the kibor rates. The net asset values are collected from the KSE as well as from Brecorder. The data available in the form of tables and excel sheet which is attach along with this article. Mainly we collect the data of the equity mutual funds. Our focus was on most commonly known mutual funds of the Pakistan market. We selected a lmost 21 mutual funds from the KSE available sources but because of the running of Regression Model, for which we need only the family funds which are in the form of groups. We neglect the individual funds because of the family proportion concern. So now the data available is of 13 mutual funds which are in the form of family. From that we could generate the family proportion of the mutual funds assets. Because the amount of the data was less for five years so we take the data in the panel form representing through panel EGLS. RESULTS These are some of the results which we conclude from the help of the CROSS SECTION MODEL FIXED EFFECT MODEL. In econometrics and statistics, a fixed effects model is a statistical model that represents the observed quantities in terms of explanatory variables that are all treated as if those quantities were non-random. This is in contrast to random effects models and mixed models in which either all or some of the explanatory variables are treated as if they arise from the random causes. Often the same structure of model, which is usually a linear regression model, can be treated as any of the three types depending on the analysts viewpoint, although there may be a natural choice in any given situation. In panel data analysis, the term fixed effects estimator (also known as the within estimator) is used to refer to an estimator for the coefficients in the regression model. If we assume fixed effects, we impose time independent effects for each entity that are possibly correlated with the regressors. The major attraction of fixed effects methods in non-experimental research is the ability to control for all stable characteristics of the individuals in the study, thereby eliminating potentially large sources of bias. Within-subject comparisons have also been popular in certain kinds of designed experiments known as changeover or crossover designs (Senn 1993). In these designs, subjects receive different treatments at different times, and a response variable is measured for each treatment. Ideally, the order in which the treatments are received is randomized. The objective of the crossover design is not primarily to reduce bias, but to reduce sampling variability and hence produce more powerful tests of hypotheses. Fixed effects methods cannot estimate coefficients for variables that have no within-subject variation Time-series cross-section (TSCS) data harness both cross-temporal and cross spatial variation to maximize empirical leverage for theory evaluation. However, this powerful data structure also requires careful consideration of temporal and spatial (cross-unit) heterogeneity, temporal and spatial dynamic processes, and potentially complex stochastic error structures. In the table 1 which is descriptive table and that is showing the mean, median and standard deviation as well. As it is clear and shows from the descriptive table that the sharp ratio, which is basically the return calculation through the sharp measure, is the negative impact on the growth of the mutual fund. As you will increase the return on the funds or the return increases over the amount of the funds the impact of it is negative on the growth of the mutual fund. Similarly the coefficient of this sharp ratio is also negative impact on the growth of the mutual funds. Now secondly, the asset turnover showing, the mean in the descriptive table representing the negative value which means that if the asset turnover will be negative so it can reduce the growth of the mutual funds. Assets are in the positive form and they show that if the asset of the fund increases so it means that the impact of this on the growth of the fund is positive and it contribute in the growth of the mutual fu nd. The family proportion of the mutual fund should have the positive impact on the growth of the mutual fund and in the table 1 of the descriptive result, the result of this is positive so it means that the family proportion increasing in this which is the positively impacting on the growth. Expense ratio is resulting negatively on the growth of the funds, and the management fee which is the basic testing of this is also showing the negative impact on the growth of the mutual funds in Pakistan. TABLE NO. 1 Descriptive Analysis GR SR AT ASSET FP ER FEE MEAN 3.989 -1.096 -0.008 2633207 0.365 1.262 54455166 MEDIAN 0.005 -0.540 0.010 1435134 0.410 1.260 38342000 MAX. 63.590 2.290 0.450 14193216 1.000 10.900 2.49708 MIN. -27.660 -5.010 -1.070 0.00000 0.000 0.000 0.00000 STD. DEV 12.763 1.470 0.272 3060791 0.255 1.644 53774795 SKEW. 2.134 -0.946 -1.834 1.951847 0.187 4.008 1.599424 PROB. 0.000 0.004 0.000 0.0000 0.729 0.000 0.0000 SUM 259.290 -71.278 -0.525 1.71608 23.400 82.060 3.54709 OBS. 65 65 65 65 65 65 65 TABLE NO. 2 Correlation Matrix DETERMINANTS GR SR AT ASSETS FP ER FEE GR 1.000 -0.269 -0.578 -0.163 0.062 0.100 -0.146 SR -0.269 1.000 0.360 0.124 0.174 -0.186 0.132 AT -0.578 0.306 1.000 0.139 0.071 -0.403 0.125 ASSETS -0.163 0.123 0.193 1.000 0.503 0.084 0.972 FP 0.061 0.174 0.071 0.503 1.000 0.270 0.538 ER 0.100 -0.187 -0.403 0.084 0.270 1.000 0.058 FEE -0.146 0.133 0.125 0.972 0.538 0.058 1.000 Now further according to the table 3 which is Fixed Effect Model, we design a panel least squares method in this model for the calculation of the data, in that the sharp ratio is resulting in the negative form and show the result that as the return on the mutual funds increases the growth effected negatively. The coefficient of the sharp ratio is negative and the result is showing significance, which is acceptable. After that assets turnover of it is in negative figure which shows a negative impact on the growth and the prob. Is significance we are keeping the level of the significance here is 0.10. The coefficient of the family proportion is positive thats good for the growth of the mutual fund but it is not significance because the prob. is higher than the level of significance. The expense ratio is showing the negative result, which means that the increase of the expense ratio is a negative impact on the growth of the mutual funds. Its coefficient value is negative and the value i s significant according to the fixed effect model. Now comes the management fee, according to this model the management fee is resulting in the positive value for the fund, that means that the funds that using the Management fee are contributing in the better growth of the fund because the coefficient value is positive but according to this model the fee is not significant here, the result is that the funds charging the fee can make the funds growing as compare to the funds that are not charging the management fee. The factor we assume here that the management fee effect positively for the growth of the funds but because of the political instability and the country economic situation it is not resulting good in the growth of the mutual funds in Pakistan. Lastly according to this model, value of Lassets is positive and the significant level is good which shows the Lassets significant. We take the assets here despite of the assets because of the mismatch and not the proper results fro m the assets. So it is impacting positively on the growth of the mutual fund. If it increases the mutual fund growth will increase. TABLE NO. 3 Fixed Effect Model Dependent Variable: GR Method: Panel Least Squares Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 DETERMINANTS COEFFICIENT STD. ERROR T-STATISTICS PROB. SR -3.772 1.532 -2.462 0.018 AT -24.784 7.253 -3.417 0.001 LASSET 0.447 0.155 2.878 0.006 FP 4.932 9.653 0.512 0.612 ER -2.250 1.054 -2.135 0.038 FEE 1.637 1.427 1.144 0.258 CONSTANT -1.456 4.251 -0.343 0.734 EFFECTS SPECIFICATIONS CROSS-SECTION FIXED (DUMMY VARIABLES) PERIOD FIXED (DUMMY VARIABLES) ADJUSTIFIED R-SQUARED 0.438 MEAN.DEP BAR 4.051 S.E OF REGRESSION 9.639 S.D. DEP BAR 12.859 SUM SQUARED RESID 3810.045 SCHWARZ CRITERION 8.418 LONG LIKELIHOOD -221.580 F-STAT. 3.227 DURBIN–WATSON STAT 1.896 PROB F-STAT 0.000 In table 4 and 5, we use the CROSS SECTION MODEL (cross section random effects cross section weights), according to both of these methods the calculations are same, the coefficient values and the significant are same. The assets turnover is showing the negative value which shows according to it that the more assets turnover can impact the growth of the mutual funds and the value is significant in both methods as well as in the fixed effect model. The value of the sharp ratio means the return of the mutual fund is showing coefficient negative in the random effect method that means that the increase of the return value can effect the growth negatively and growth is less when this return value is high while the value is significant which means it is good for the growth of the mutual fund and same value is showing in the fixed effect method. But in the cross section weights method the value of the return is positive and it is not significant there. So it shows here a that the higher ret urn impact the mutual fund growth positively means higher the return higher the growth of the mutual fund nut it is nit the case here. Family proportion of the mutual funds according to the both methods says that the results are showing positive relationship in the growth of the funds and the higher the family proportion. The values are significant according to the probability measures. Expense ratio according to both of these models reflects the results that expense ratio is impacting the growth of the funds negatively. Means as the ratio of the expense increase the growth is going to be less for the mutual funds. The coefficient value of the expense ratio is in negative value and the value in both the methods shows that this is significant. As far as the Management fee is concerned here so according to the both methods the management fee is impacting on the growth inversely. The coefficient value in both the cases is negative means if the management fee is charged by the mutual fu nd management so the growth is less than if they dont charge the management fee. And the value is significant in both the methods. So it is clear from now that according to the Cross Section Model the impact of the management fee is negative on the growth of the mutual funds. The management who is charging the management fee their growth of the mutual funds is less and downward. TABLE NO. 4 Cross Section Weights Dependent Variable: GR Method: Panel EGLS (Cross Section Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 54 Cross-sections included: 13 Linear Estimation after One-Step Weighting Matrix VARIABLE COEFFICIENT STD.ERROR T-STAT PROB SR 0.439 0.825 0.532 0.596 AT -32.916 3.815 -8.628 0.000 FP 4.404 3.353 2.506 0.016 ER -2.032 0.719 -2.825 0.006 FEE -5.297 1.997 -2.665 0.010 LASSET 0.447 0.155 2.877 0.006 WEIGHTED STATISTICS R-SQUARED 0.788 MEAN DEPENDENT VAR 7.211 ADJ. R-SQRD 0.766 S.D. DEPENDENT VAR 20.513 S.E. OF REG 9.905 SUM SQUARED RESID 4709.255 DURBIN-WATSON STAT 1.785 UN-WEIGHTED STATISTICS R-SQUARED 0.396 MEAN DEPENDENT VAR 4.801 SUM SQUARED RESID 6164.67 DURBIN-WATSON STAT 1.521 TABLE NO. 5 Cross Section Random Effect Model Dependent Variable: GR Method: Panel EGLS (Cross-Section random Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 Swamy and Arora estimator of component variances VARIABLE COEFFICIENT STD.ERROR T-STAT PROB CONSTANT 1.663 2.777 0.599 0.551 Determinants of Mutual Fund Growth in Pakistan Determinants of Mutual Fund Growth in Pakistan This study is actually about the mutual fund growth and the determinants which are influencing on the growth of these funds. We ask whether the growth of funds is influences by the management fee, family proportion and the expense ratio or not. How much these variables influenced the growth of funds. We further check out the relation of the family assets and the return on the funds with the performance of the funds. Investors are paying the charges to control the funds and for the growth of the funds in the shape of management fee and the administrative charges. We study the behavior and the output of the funds from the duration of 2005-2009. We selected the funds which are listed in KSE. The funds are selected which are in the family proportions because of the nature of regression model which is used for the calculation of the effect of determinants on the growth of the funds. We use two models for the interpretation of the data. These are fixed effect model and cross section model. Through these models we elaborate the effects of different factors on the growth of these funds. We focus on the management fee for checking the efficiency of the funds management. Whether these are contributing in the growth of the funds or not, if not then these fee is only for the benefit of funds management INTRODUCTION In Pakistan the mutual fund industry handles a significant portion of the assets of individual investors. Basically there are many factors which can affects on the growth of the mutual fund. In these determinants of the mutual funds which can affect the growth of the mutual fund we are focusing on the management fee, the main focus is on the charging of the management fee and its impact on the growth. Whether it is beneficial for the growth or not? Along with this we are determining some other major determinants of which can influence on the growth of these funds in Pakistan. Compensation to managers is primarily in the form of a Management fee. With few exceptions, Management fees are charged as a percentage of the assets under management rather than on the basis of performance. It is therefore in the interest of management to grow the total assets in the fund and in the associated fund family. One tool that managers may use to grow funds is the Management fee. The fees, which are l imited to1% to 3% per year as Management fee, are used to cover administrative costs. This paper studies whether or not the charging of a Management fee support the investors by growing the worth of mutual funds family along with that of some other determinants. Next we checked that the charging of Management fee leads to greater cash inflow for the funds which charge them. We focus on various mutual funds existing in the Karachi Stock Exchange and listed there, in order to control for the variety of commission payment schemes associated with management fee charging funds that are now available to shareholders and are in the group of families charging Management fee. LITERATURE REVIEW These are some of the review from the experts and the researchers. Academic opinion on mutual fund fees is generally critical. Bogle, points out that the average cost of owning mutual funds has risen over 100 percent in the last sixty years. Freeman and Brown contend mutual fund advisory fees alone are excessively high. In their view the mutual fund industry is dominated by conflicts of interest where the mutual fund boards fail to negotiate arms-length management contracts with asset managers. In their view asset managers are over compensated for the services that they provide. Similarly Ang, Chen and Lin argue that the primary benefit that managers can provide to the shareholders is the reduction of expenses. The reason is that management has more control over expenses than over any other aspect of the return to the shareholders. Therefore, if managers are not working to reduce expenses they are failing to carry out their primary duty to the shareholders. Golec found that fund managers are compensated primarily on the basis of a percentage of the assets under management. That compensation scheme provides fund managers with a strong incentive to grow fund assets regardless of the degree to which such growth is consistent with shareholder welfare. Collins, along with Livingston and ONeal (1998) and ONeal (1999) argue that some investors pay to receive professional investment advice and assistance in the purchase of mutual funds. Essentially they argue that brokers provide some combination of resolving asymmetric information for investors and providing a needed service in completing and maintaining the required records in order to complete the investing process. We closely examine the issue of whether brokers primarily resolve asymmetric information or primarily provide investors with record completion and maintenance services. One way to grow the assets is to well manage the fund by the fund management of that varies funds. Management f ees provide a source of funds for controlling and managing the funds. Naim Sipra (2008) one of the interesting things to note is the low correlation between the funds and the market portfolio. In US studies the correlation between the market and mutual funds is often 0.9 or above. A high correlation with the market is an indication of a high degree of diversification. The low correlation in the Pakistani case suggests that the mutual funds are not doing a very good job of diversification. The low correlation and also the low betas are probably due to inclusion of fixed income securities such as the Term Finance Certificates (TFCs) in the portfolios of these funds. Since the composition of the funds is not publicly known therefore it is not possible to analyze this issue any further. Ali S M, Malik A S (2006) A Capital markets play a vital role in the economic development of a country. It is now widely accepted that there is a direct correlation between economic growth and the development of the financial sector. Mutual funds are considered to be an imp ortant source of injecting liquidity into the capital markets. A well established financial intermediation system facilitates the economic activity by mobilizing domestic as well as foreign savings. Muhammad Akbar Saeed (2004) during the last two years, mutual fund sector has more than tripled in size to Rs. 112 billion (as of 31-Dec-04). The industry players are predicting that the business is likely to grow by 200 percent over the next five years. The success of the industry will lie in several factors, one of which will be the role of regulators and their efforts to continuously evolve the code of corporate governance for the mutual fund industry. Moeen Cheema and Sikandar A. shah (2006) Mutual funds are becoming vehicles of securities investments most favored by the general public worldwide. Whereas, this trend is more pronounced in the developed securities markets of the United States of America and Europe, mutual funds are increasingly gaining the public attention in the developing economies as well. Pakistan is not an exception to this global trend and even though mutual funds form a comparatively small segment of the securities markets, they have grown phenomenally over the last few years. According to the Mutual Fund Association of Pakistan (MUFAP), whereas mutual funds may not shield investors from the risks associated with overall market failure, the ability to diversify that they provide may reassure public investors as regards the failure of individual companies and hence make them less wary of insider opportunism in any given corporation. We similarly consult some of the related articles for this purpose, which can be seen from the references. We also consult some of the conflicting matters with the course instructor. In summary, Management fee is basically for the controlling of the mutual funds and for the growing purpose of the funds. But is it working well for the growth of the mutual funds which funds are being charging this fee. HYPOTHESES AND METHODOLOGY This paper studies whether the shareholders income and their wealth increase from the growth of the mutual funds through the charging of Management fees. The main focus on the Management Fee but there are some other determinants like family proportion, expense ratio, return through sharp ratio and assets turnover in that specific duration which we selected for the research purpose. There are a number of ways in which investors could enjoy by the growing of wealth from funds which charge this fee. Since the fee is used for administrative expenses. It could aid investors by making them aware of high quality managed funds that might otherwise be invisible to them. There are several possible examples of funds where this might apply. First, funds charging this management fee lead the higher total returns. Funds with greater total returns would benefit investors in that, if the superior performance was persistent, investors would have a higher terminal wealth from investing in these funds than they would have from investing in other funds. A fee showing the existence superior total returns would be of great of interest to investors. The null hypothesis: Ho: There is no difference between the total returns of mutual funds that charge the Management fee and those that do not charge the Management fee will be tested. Second, the Management fee might be a signal to investors of a greater risk adjusted rate of return. A greater risk adjusted return would imply that investors could earn superior returns with less chance of loss with respect to other portfolios offering the same level of return. The second null hypothesis to be tested is: Ho: There is no difference in risk adjusted returns between the risk adjusted return of mutual funds that charge the Management fee and those that do not charge the Management fee. 2nd hypothesis will be tested using Sharpe Ratio. It needs to be noted that these null hypotheses could be rejected either because the funds charging the Management fee over perform or because they under perform. If there is persistent over performance, the over performance is in the interest of the investors. However, persistent under performance would mean that the fee being paid by the investors is being used to let them know that these mutual funds are not performing well that will leave the investors with less terminal wealth. Such a result would be consistent with the view that Management fees are inconsistent with shareholders income growth. Third, the funds charging the Management fee could be the funds that have lower expense ratios. The numerator of the expense ratio includes all of the operating costs of managing the fund; including the management fee and other administrative costs as well as all the expenses. It may be that after the Management fee is removed from the expense ratio the fund has lower expenses than other funds. Such a result would support the idea that the fee itself is merely a substitute for other costs and that the investor in such a fund is no worse off, and could be better off than the investor in a fund that does not have the fee. The null hypothesis to be tested is: Ho: There is no difference of the expense ratios of the funds on the growth of the mutual funds. 3rd hypothesis will be tested after subtracting the Management fee from the expense ratio. The null hypothesis could be rejected because the funds charging the fee have lower expense ratios or because the funds charging the fee have greater expense ratios. In the first case the management fee would be in the interests of shareholders and in the second case the fee would not be in the interests of shareholders. If it is found that the management fee is not supporting the growth of the mutual funds of shareholders, the other alternative is that the fee is in the favor of the fund management. It would be in the interest of fund management to charge the management fee if the existence of the fee led to faster asset growth than could otherwise be expected. Management desires faster asset growth because of the manner in which management is compensated. Fourth, managers might be using management fees to grow funds more rapidly than they would otherwise be growing. The growth of the fund from time t to t+1 is defined as: Gi = (Assetst Assetst -1(1+R))/Assetst -1 (1)†¦Ã¢â‚¬ ¦Equation Where Gi is the growth rate in the assets under management by fund i from time t-1 to time t. Assetst are the net assets under management at time t. Since the assets under management may grow either due to new sales or returns, equation 1 eliminates the growth that is due to returns. For all of the funds in the study, the management fee is based on the net assets under management which may provide a managerial incentive to grow the fund as rapidly as possible. Ho: The growth rate of mutual funds that charge management fee is higher as compare to the funds which are not charging the fee. We will test whether the funds that charge the fees actually are growing faster using a regression model that controls for risk adjusted return, asset turnover rate, the relative size of the mutual fund within a family of funds, the expense ratio of the fund other than the management fee and the level of the management fee. Gi = ÃŽ ² 0 + ÃŽ ² 1RARi + ÃŽ ² 2ATi + ÃŽ ² 3ASSETi + ÃŽ ² 4FAMPROi + ÃŽ ² 5ERi + ÃŽ ² 6FEEi + ÃŽ ² i †¦2) Equation Gi is the growth due to new investment in funds i from previous year t to current year t+1. Growth is defined by equation 1. This sign (?) Measures the sensitivity of the growth rate of the mutual fund to the specified factor in each case. An expected positive sign means that the growth rate is expected to respond positively to increases in the variable. An expected negative sign means that the growth rate is expected to respond negatively to increases in the variable. The expected sign is specified for each of the control variables. RARi is the risk adjusted returns on fund i from year t to t+1, estimated by using the Sharpe Ratio. In accordance with past findings, this control variable is hypothesized to have a positive sign and does take a positive sign. ATi is the asset turnover for fund i which is measured through the formula of Net Income divided by the Total Assets. Turnover is a measure of investing activity. The greater the turnover, the greater the cost of operating the fund. Holding all else equal, the greater the cost of operating the fund the lower the growth in the fund. This variable is hypothesized to have a negative sign and does have a negative sign. ASSETi is the total assets of fund i at time t. The larger a fund, generally, the older the fund is so that assets serve as a proxy for the age of the fund. The older a fund, the more well known the fund is to the investing public and the easier it will be to sell the fund. Assets are expected to and do have a positive relation with growth. FAMPROi is the proportion of the mutual fund family assets made up by fund i. The larger the proportion of the family assets in the fund the slower will be the growth, as management efforts will be directed primarily at the newer, smaller funds. This variable is expected to have a negative sign and generally has a negative sign. ERi is the expense ratio of fund i , less the management fee from all the expenses. The expense ratio includes all of the costs that the management company charges to the fund including the management fee, trading costs, and any other expenses. Since the purpose of the test is to isolate the effect of the management fee, that fee is subtracted from the expense ratio. The greater the expense ratio, the lower the growth. Investors should prefer a lower cost fund to a higher cost fund. The variable generally has the expected negative sign. FEEi is the level of the Management fee. For the vast majority of the funds in the study, this variable will be charged by 1% to 3%. It is expected that the null hypothesis will be rejected and that this variable will have a positive sign which is generally the case. The regression model (Equation 2) is estimated on an annual basis for the years 2004 through 2009 for all funds that have all required data available. Equity and fixed income funds are examined separately. A positive and significant sign on the FEE variable will lead to a rejection of the null hypothesis and will be consistent with the idea that the Management fee is used by management to increase growth in assets. There are two economic rationales that apply to the imposition of the Management fee on mutual fund investors. The first is that investors are the primary beneficiaries. The second is that fund management is the primary beneficiary of the fee. The major contribution of this paper is to determine whether the facts are more consistent with the investors or the managers being the beneficiaries for mutual funds. THE DATA All of the data are taken for the years 2004 through 2009. Since 2004 is the first year and lagged data is needed, the results are presented for all funds for which all data was available for 2005 through 2009. The data are summarized in the table form and data is regarding the equity funds. As far as the collection of the data is concerned so we consult many sources for the collection of the data. Mainly we collect it from KSE. From where the full data was not available and after that we consult the Business recorder, Statistical Bulletin of Pakistan [Federal Bureau of Statistics (2005)] for 2005-2009 and SBP for the collection of the financial reports and the kibor rates. The net asset values are collected from the KSE as well as from Brecorder. The data available in the form of tables and excel sheet which is attach along with this article. Mainly we collect the data of the equity mutual funds. Our focus was on most commonly known mutual funds of the Pakistan market. We selected a lmost 21 mutual funds from the KSE available sources but because of the running of Regression Model, for which we need only the family funds which are in the form of groups. We neglect the individual funds because of the family proportion concern. So now the data available is of 13 mutual funds which are in the form of family. From that we could generate the family proportion of the mutual funds assets. Because the amount of the data was less for five years so we take the data in the panel form representing through panel EGLS. RESULTS These are some of the results which we conclude from the help of the CROSS SECTION MODEL FIXED EFFECT MODEL. In econometrics and statistics, a fixed effects model is a statistical model that represents the observed quantities in terms of explanatory variables that are all treated as if those quantities were non-random. This is in contrast to random effects models and mixed models in which either all or some of the explanatory variables are treated as if they arise from the random causes. Often the same structure of model, which is usually a linear regression model, can be treated as any of the three types depending on the analysts viewpoint, although there may be a natural choice in any given situation. In panel data analysis, the term fixed effects estimator (also known as the within estimator) is used to refer to an estimator for the coefficients in the regression model. If we assume fixed effects, we impose time independent effects for each entity that are possibly correlated with the regressors. The major attraction of fixed effects methods in non-experimental research is the ability to control for all stable characteristics of the individuals in the study, thereby eliminating potentially large sources of bias. Within-subject comparisons have also been popular in certain kinds of designed experiments known as changeover or crossover designs (Senn 1993). In these designs, subjects receive different treatments at different times, and a response variable is measured for each treatment. Ideally, the order in which the treatments are received is randomized. The objective of the crossover design is not primarily to reduce bias, but to reduce sampling variability and hence produce more powerful tests of hypotheses. Fixed effects methods cannot estimate coefficients for variables that have no within-subject variation Time-series cross-section (TSCS) data harness both cross-temporal and cross spatial variation to maximize empirical leverage for theory evaluation. However, this powerful data structure also requires careful consideration of temporal and spatial (cross-unit) heterogeneity, temporal and spatial dynamic processes, and potentially complex stochastic error structures. In the table 1 which is descriptive table and that is showing the mean, median and standard deviation as well. As it is clear and shows from the descriptive table that the sharp ratio, which is basically the return calculation through the sharp measure, is the negative impact on the growth of the mutual fund. As you will increase the return on the funds or the return increases over the amount of the funds the impact of it is negative on the growth of the mutual fund. Similarly the coefficient of this sharp ratio is also negative impact on the growth of the mutual funds. Now secondly, the asset turnover showing, the mean in the descriptive table representing the negative value which means that if the asset turnover will be negative so it can reduce the growth of the mutual funds. Assets are in the positive form and they show that if the asset of the fund increases so it means that the impact of this on the growth of the fund is positive and it contribute in the growth of the mutual fu nd. The family proportion of the mutual fund should have the positive impact on the growth of the mutual fund and in the table 1 of the descriptive result, the result of this is positive so it means that the family proportion increasing in this which is the positively impacting on the growth. Expense ratio is resulting negatively on the growth of the funds, and the management fee which is the basic testing of this is also showing the negative impact on the growth of the mutual funds in Pakistan. TABLE NO. 1 Descriptive Analysis GR SR AT ASSET FP ER FEE MEAN 3.989 -1.096 -0.008 2633207 0.365 1.262 54455166 MEDIAN 0.005 -0.540 0.010 1435134 0.410 1.260 38342000 MAX. 63.590 2.290 0.450 14193216 1.000 10.900 2.49708 MIN. -27.660 -5.010 -1.070 0.00000 0.000 0.000 0.00000 STD. DEV 12.763 1.470 0.272 3060791 0.255 1.644 53774795 SKEW. 2.134 -0.946 -1.834 1.951847 0.187 4.008 1.599424 PROB. 0.000 0.004 0.000 0.0000 0.729 0.000 0.0000 SUM 259.290 -71.278 -0.525 1.71608 23.400 82.060 3.54709 OBS. 65 65 65 65 65 65 65 TABLE NO. 2 Correlation Matrix DETERMINANTS GR SR AT ASSETS FP ER FEE GR 1.000 -0.269 -0.578 -0.163 0.062 0.100 -0.146 SR -0.269 1.000 0.360 0.124 0.174 -0.186 0.132 AT -0.578 0.306 1.000 0.139 0.071 -0.403 0.125 ASSETS -0.163 0.123 0.193 1.000 0.503 0.084 0.972 FP 0.061 0.174 0.071 0.503 1.000 0.270 0.538 ER 0.100 -0.187 -0.403 0.084 0.270 1.000 0.058 FEE -0.146 0.133 0.125 0.972 0.538 0.058 1.000 Now further according to the table 3 which is Fixed Effect Model, we design a panel least squares method in this model for the calculation of the data, in that the sharp ratio is resulting in the negative form and show the result that as the return on the mutual funds increases the growth effected negatively. The coefficient of the sharp ratio is negative and the result is showing significance, which is acceptable. After that assets turnover of it is in negative figure which shows a negative impact on the growth and the prob. Is significance we are keeping the level of the significance here is 0.10. The coefficient of the family proportion is positive thats good for the growth of the mutual fund but it is not significance because the prob. is higher than the level of significance. The expense ratio is showing the negative result, which means that the increase of the expense ratio is a negative impact on the growth of the mutual funds. Its coefficient value is negative and the value i s significant according to the fixed effect model. Now comes the management fee, according to this model the management fee is resulting in the positive value for the fund, that means that the funds that using the Management fee are contributing in the better growth of the fund because the coefficient value is positive but according to this model the fee is not significant here, the result is that the funds charging the fee can make the funds growing as compare to the funds that are not charging the management fee. The factor we assume here that the management fee effect positively for the growth of the funds but because of the political instability and the country economic situation it is not resulting good in the growth of the mutual funds in Pakistan. Lastly according to this model, value of Lassets is positive and the significant level is good which shows the Lassets significant. We take the assets here despite of the assets because of the mismatch and not the proper results fro m the assets. So it is impacting positively on the growth of the mutual fund. If it increases the mutual fund growth will increase. TABLE NO. 3 Fixed Effect Model Dependent Variable: GR Method: Panel Least Squares Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 DETERMINANTS COEFFICIENT STD. ERROR T-STATISTICS PROB. SR -3.772 1.532 -2.462 0.018 AT -24.784 7.253 -3.417 0.001 LASSET 0.447 0.155 2.878 0.006 FP 4.932 9.653 0.512 0.612 ER -2.250 1.054 -2.135 0.038 FEE 1.637 1.427 1.144 0.258 CONSTANT -1.456 4.251 -0.343 0.734 EFFECTS SPECIFICATIONS CROSS-SECTION FIXED (DUMMY VARIABLES) PERIOD FIXED (DUMMY VARIABLES) ADJUSTIFIED R-SQUARED 0.438 MEAN.DEP BAR 4.051 S.E OF REGRESSION 9.639 S.D. DEP BAR 12.859 SUM SQUARED RESID 3810.045 SCHWARZ CRITERION 8.418 LONG LIKELIHOOD -221.580 F-STAT. 3.227 DURBIN–WATSON STAT 1.896 PROB F-STAT 0.000 In table 4 and 5, we use the CROSS SECTION MODEL (cross section random effects cross section weights), according to both of these methods the calculations are same, the coefficient values and the significant are same. The assets turnover is showing the negative value which shows according to it that the more assets turnover can impact the growth of the mutual funds and the value is significant in both methods as well as in the fixed effect model. The value of the sharp ratio means the return of the mutual fund is showing coefficient negative in the random effect method that means that the increase of the return value can effect the growth negatively and growth is less when this return value is high while the value is significant which means it is good for the growth of the mutual fund and same value is showing in the fixed effect method. But in the cross section weights method the value of the return is positive and it is not significant there. So it shows here a that the higher ret urn impact the mutual fund growth positively means higher the return higher the growth of the mutual fund nut it is nit the case here. Family proportion of the mutual funds according to the both methods says that the results are showing positive relationship in the growth of the funds and the higher the family proportion. The values are significant according to the probability measures. Expense ratio according to both of these models reflects the results that expense ratio is impacting the growth of the funds negatively. Means as the ratio of the expense increase the growth is going to be less for the mutual funds. The coefficient value of the expense ratio is in negative value and the value in both the methods shows that this is significant. As far as the Management fee is concerned here so according to the both methods the management fee is impacting on the growth inversely. The coefficient value in both the cases is negative means if the management fee is charged by the mutual fu nd management so the growth is less than if they dont charge the management fee. And the value is significant in both the methods. So it is clear from now that according to the Cross Section Model the impact of the management fee is negative on the growth of the mutual funds. The management who is charging the management fee their growth of the mutual funds is less and downward. TABLE NO. 4 Cross Section Weights Dependent Variable: GR Method: Panel EGLS (Cross Section Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 54 Cross-sections included: 13 Linear Estimation after One-Step Weighting Matrix VARIABLE COEFFICIENT STD.ERROR T-STAT PROB SR 0.439 0.825 0.532 0.596 AT -32.916 3.815 -8.628 0.000 FP 4.404 3.353 2.506 0.016 ER -2.032 0.719 -2.825 0.006 FEE -5.297 1.997 -2.665 0.010 LASSET 0.447 0.155 2.877 0.006 WEIGHTED STATISTICS R-SQUARED 0.788 MEAN DEPENDENT VAR 7.211 ADJ. R-SQRD 0.766 S.D. DEPENDENT VAR 20.513 S.E. OF REG 9.905 SUM SQUARED RESID 4709.255 DURBIN-WATSON STAT 1.785 UN-WEIGHTED STATISTICS R-SQUARED 0.396 MEAN DEPENDENT VAR 4.801 SUM SQUARED RESID 6164.67 DURBIN-WATSON STAT 1.521 TABLE NO. 5 Cross Section Random Effect Model Dependent Variable: GR Method: Panel EGLS (Cross-Section random Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 Swamy and Arora estimator of component variances VARIABLE COEFFICIENT STD.ERROR T-STAT PROB CONSTANT 1.663 2.777 0.599 0.551

The Future In Technology Essay -- essays research papers

Can you imagine a machine so big it dwarfs entire planets? Can you imagine a machine with a single goal, a single purpose? Can you see it, hovering in space, blotting out the stars, so big it bends thought? Can you imagine a machine so complex that no human has ever even tried to understand it, and yet the machine exists because humans built it in the first place? A machine consisting of entire worlds, entire ecosystems powered by chemicals and energy regulated by computers that build and program themselves. Imagine these worlds connected by transport and communications systems, always kept up to date automatically, and modified as needed by the people who live in these habitats. Can you imagine a machine that makes money obsolete, anything you need is anticipated designed and made ready as fast as physically possible? Can you imagine this machine whose soul purpose is to keep hundreds of millions of multiplying people alive and happy at all times, growing bigger and bigger, growing more complex in the race to stay functioning, replacing its own parts by better parts designed by the machine itself, making it able to design and build even more complex parts, until the machine curves in on perfection, but never really reaches it. Can you imagine a machine with these capabilities being forced to purify and expand itself in order to fulfill trilli ons of people's needs? Can you see it being forced to build computers fast enough to plot every atom in a planet simply to manage th...

A Novel About The Absence Of A Nurturing Parent Essay

‘Frankenstein’ was written by Mary Wollstonecraft Shelley in 1816, after a frightful and horrific nightmare of a man conceiving outside the womb. Shelley had been staying with her husband and Lord Byron on the banks of Lake Geneva. She used the influences of her own personal experiences, Milton’s ‘Paradise Lost’, Luigi Galvanni’s electrical experiments and the nightmare which occurred only a few nights before. I think that her experiences of losing her mother and having a negligent father were fundamental in developing the core of the story. When the novel was first published in 1818, it was the first example of Gothic fiction. It also got mixed reviews as society at the time was extremely religious however, the Age Of Enlightenment was just coming to an end and so science was also highly important. ‘Frankenstein’ is a novel about a scientist, determined to push back the boundaries of what is humanly possible, blinded by a hubristic desire for human omnipotence. Victor Frankenstein, the protagonist, artificially creates being by reanimating lifeless body parts. The being is then rejected by his creator and society, resulting in disastrous consequences including the death of Victor’s closest friends and family. ‘Frankenstein’ is definitely a novel about the absence of a nurturing parent and the effects which it can cause. I believe that it is a parent’s responsibility and duty to love and care for their child, making sure to raise them sufficiently. Parents should teach their children morals and should set a good example for them to follow. However, in the novel, none of this is observed as Victor abandons his creation almost immediately and only serves to be an awful role model to his child. On numerous occasions, he calls the creation, ‘wretched thing’, ‘demoniacal being’ and ‘monster’. This is due to the fact that Victor never gives his creation a name which is a basic responsibility of a parent as without a name, a person lacks identity. This is the foundation of all the monster’s crimes and the mayhem he created as the monster says, ‘misery made me a fiend, make me happy, and I shall be virtuous’. This suggests that due to Victor’s absence and the disregard he had for his creation, the creation was miserable and wreaked havoc. In chapter five, Victor animates his creation. Immediately after the monster awakes, Shelley utilises a horrifying lexis to create a semantic field of horror thus giving the readers the image of a truly disgusting being. Shelley writes, ‘I beheld the wretch-the miserable monster whom I had created’ and, ‘his shrivelled complexion and straight back lips’. These give a sense of the disgust which Victor straight away has for his creation and creates pathos for the monster as we see that even his father does not love or respect him. Also in this chapter, Victor says, ‘his arm stretched out seemingly to detain me’. Victor sees this as an act of aggression however, it is most likely a sign to connote the being’s need and love for his creator. In chapter ten, Victor faces up to his monster however, his feelings and the perspective in which he views his creation have not altered as he ‘trembled with rage and horror’ and was ready to engage in ‘mortal combat’. He also describes his monster as, ‘unearthly ugly’, ‘too horrible for human eyes’, ‘devil’ and ‘vile insect’. The monster however reacts in an extremely mature fashion, and in a more reasonable and rational approach than Victor himself. The monster says, ‘be calm, I entreat you to hear me, before you give vent to your hatred on my devoted head’. This shows the harsh and enormously diverse duality between the monster and Victor. However, the monster is acting like the mature and reasonable parent in this situation and Victor is acting like the immature and selfish child who isn’t getting his way and therefore has to throw a tantrum. This constant rejection by his creator creates severe pathos for the monster as we feel sorry for his misfortune and the fact that he is unloved. In chapter seventeen, the monster asks his father to create a female companion for him as he sees this as an opportunity to escape from the hatred and rejection which he faces from society. Shelley’s lexis creates pathos by writing the monster as portraying himself as lonely and desperate. He sees the prospect of a companion ‘as hideous as [himself]’ to be a way to mitigate the contempt shown towards him. In chapter twenty-four, Victor dies on Captain Walton’s ship in the Arctic. Shelley writes the monster mourning over his creator’s death. He takes full responsibility for his Victor’s demise, saying, ‘this is also my victim’. He is saddened and livid with himself for his actions, saying, ‘I, the miserable and the abandoned, am an abortion, to be spurned and, and kicked, and trampled on’. This shows that the monster loved Victor even though Victor never felt the same way. This shows that the monster has good inside him and always had the potential to be good however, the absence of his father and the lack of any form of nurturing parent. Pathos is created here as the monster wants forgiveness for the death of Victor and all his other misdeeds. Shelley uses a broad variety of lexis in her novel to create pathos for example, Victor calls the monster ‘devil’, ‘vile insect’, ‘wretched thing’ and ‘demoniacal being’. Some of these words are religious which is a recurring theme throughout the novel. Shelley contrasts the pro and antagonists, especially during belligerent scenes by portraying the monster as a calm, relaxed and modest being whereas Victor is a haughty, out-spoken and agitated. This is shown through numerous exclamation marks during Victor’s dialogue and often the mention of the phrase, ‘be calm’ during the monster’s. This shows the monster’s superior maturity and wisdom which is also shown through the contrast in sentence structure of each character’s discourse. Victor uses short, sharp sentences whereas the monster’s vocabulary is extremely fluent, articulate and expressive. I believe that ‘Frankenstein’ is indeed a novel about the absence of a nurturing parent. Although it confronts many other issues for example: the consequences of the lack of a maternal figure, reciprocity and also the penalties of man rivalling God, the fact that the monster had no real parents to raise him sufficiently, is the most prominent theme of the novel and the main reason of all of his transgressions.

Palliative Care and Hospice Care: The Principles and Goals They Set Essay

The principles of palliative care and hospice care have similar goals that may often come together in an effort of providing the best care for a patient. Palliative care is holistic care of an individual with a chronic life debilitating condition whereas hospice care is for those with a terminal condition who have been diagnosed with 6 months or less to live. Palliative care usually will begin prior to the hospice care and continues to be joined with hospice care. â€Å"It is important to note that the prognosis-based distinction between palliative care (eligibility based on need, no prognostic restriction) and hospice (eligibility based on a prognosis of living less than six months) is unique to the United States, whereas in other countries the terms palliative care and hospice are largely synonymous†(1) â€Å"The Institute of Medicine ([IOM], 2003) defined palliative care as the total active care of the body, mind, and spirit. The aim of palliative care is to prevent or les sen the severity of pain and other symptoms, and to achieve the best quality of life† (IOM, 2003, p.2) throughout the course of any life –threatening or life-limiting healthcare condition.† (2) In providing palliative care to an individual the possibility of curing the illness still exists. The patient is made as comfortable as possible but has not been given a time frame for death. An â€Å"Interdisciplinary palliative care teams assess and treat symptoms, support decision making and help match treatments to informed patient and family goals, mobilize practical aid for patients and their family caregivers, identify community resources to ensure a safe and secure living environment, and promote collaborative, and seamless models of care across a range of care settings (i.e., hospital, home, and nursing home).†(1) Palliative care begins when an individual’s quality of life has decreased because of their disease process and the prognostic restriction is not available. With hospice care, the illness is terminal. The interdisciplinary team will also assess the patient but will not seek a cure for the condition. Their goal now is care and comfort with the emphasis being comfort. â€Å"Hospice is a movement that offers palliative care to terminally ill patients; this type of care eases pain and suffering and helps a patient die with dignity but does not attempt to cure illness. This care may take place at home or in the  hospital. Some larger communities have a separate facility devoted to hospice care.†(3) With hospice care the individual and family have accepted the imminence of death with a six month period and the care the patient will receive will be based on making sure the patient is comfortable at all times. The facilities that provide hospice care are successful because the dignity and comfort of individual and critically important to both the patient and their family. Hospice care gives support to not only the patient but also to the family during this difficult time. This process of beginning hospice care is often delayed by the patient and patient family because it is makes the phase of dying a reality. Hospice confirms that there is not a cure available for a loved one and makes death more of a reality. Hospice also makes this last phase of dying more acceptable, and provides the spiritual comfort for the patient and their family. Hospice care is not just patient based care, it is family based care. In discussing palliative care versus hospice care we can ascertain that â€Å"palliative care may be appropriate for anyone with a chronic progressive disease when symptom management becomes a challenge.†, but hospice care is palliative care for the terminally ill. The difference in these two types of care and the phase of death an individual is currently experiencing meaning the prognosis of death. â€Å"Hospice care is appropriate when patients and their families decide to forgo curative therapies in order to focus on maximizing comfort and quality of life, when curative treatments are no longer beneficial, when the burdens of these treatments outweigh their benefits, or when patients are entering the last weeks or months of life†(1) References Bonebrake, D., Call, K., Culver, C., & Ward-Smith, P. (2010, June). Clinically differentiating palliative care and hospice. Clinical Journal of Oncology Nursing, 14(3), 273+. Retrieved from http://go.galegroup.com/ps/i.do?id=GALE%7CA231807936&v=2.1&u=lincclin_fccj&it=r&p=AONE&sw=w&asid=cb9b3d9659946c2bae4f99e7c40bd81c Kincaid, L., & Labell, L. (2011). Death and Dying: Hospice . Human Growth and Development (Third Edition ed., ). Jacksonville: Florida State College. Meier, D. (2011). Increased access to palliative care and hospice services: opportunities to improve value in health care. The Milbank Quarterly, 89(3), 343-380. doi:10.1111/j.1468-0009.2011.00632.x