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| Home :: Sevices :: Mutual Fund |
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| 1. What is a Mutual Fund ? |
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| A Mutual Fund is an investment vehicle which pools together investor's money generally to purchase Stocks and Bonds. Investors participate in Mutual Fund by purchasing shares of the entire pool of assets, thus diversifying their investments. The pooled assets are invested by professional managers who buy and sell securities on behalf of the investors. |
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| The activity of investing and managing the portfolio is quite onerous and hence, delegated to an Asset Management Company (AMC) for a fee. Since the mutual fund beneficiaries (or unit holders, as they are more commonly called) may have their own pre-occupation, they also entrust the job of keeping an eye on the AMC to a Set of Trustees. |
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| 2. Why do people use Mutual Fund Scheme ? |
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| Many people purchase Mutual Funds because they are a convenient and cost effective method of obtaining Diversification and Professional Management. Mutual funds hold anywhere from a few securities to several thousands, risk is spread out over a number of investments. Additionally, mutual funds generally buy and sell securities in volume, which allows investors to benefit from lower trading, management and research costs. Another advantage that mutual funds offer is that fund performance is subject to frequent reviews by various publications and rating agencies, making it possible for investors to conduct direct comparisons between funds. |
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