Mutual Funds

A mutual fund is just the connecting bridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective.

Professional Management:The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds).

Fund ownership: When you invest in a mutual fund, you are buying units or portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund.

Mutual Funds are Diversified
Mutual funds are considered as one of the best available investments as compare to others.They are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they try to do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns.

How are mutual funds regulated?
SEBI and/or the RBI (in case the AMC is promoted by a bank) regulates all Asset Management Companies (AMCs).In addition, every mutual fund has a Trustee who represents the unit holders’ interests in the mutual fund.

Mutual fund Objective
For example, an objective of a growth stock fund might be: This fund invests primarily in the equity markets with the objective of providing long-term capital appreciation towards meeting your long-term financial needs such as retirement or a child’s education.