What are mutual funds
Mutual funds is an investment programme funded by shareholders who trade in diversified holdings and is professionally managed. Also, it is a kind of common fund created and invested in one or many asset classes like equity, debt, liquid assets etc.
Given are the terms which should be known by applicants of mutual fund:
- Fund Units or Shares
- Net Asset Value
- Lock-in Period
- Entry Load / Exit Load
- Offer document
- Assets Under Management (AUM)Expense Ratio
- New Fund Offer (NFO)
What are the advantages of
investing in Mutual Funds?
- Mutual funds are managed by fund managers of asset management companies which is important for professional management.
- An investment can be made by those who do not have sizeable amounts in direct equity or other instruments that require a high initial investment, mutual funds make for an affordable investment avenue.
- All mutual funds are focused investments feature schemes clearly specifying which assets are targeted for investments, allowing investors to direct savings to different asset classes in an organised and focused manner.
- SEBI ensures regulated investments and dealings are as per regulations.