19-06-2013, 11:12 AM
INVESTMENT in MUTUAL FUND
INVESTMENT in MUTUAL.ppt (Size: 699.5 KB / Downloads: 19)
Concept of mutual fund
A mutual fund is a professionally-managed firm of collective investments that pools money from many investors and invest it in stocks, bonds etc.
Mutual fund have a fund manager who invests the money on behalf of the investors by buying/selling stocks, bonds etc.
Why investor prefer Mutual fund ?
They can buy their shares directly from market.
But this require spending time to find out the performance of the company whose share is being purchased, understanding the future business prospects of the company, finding out the track record of the promoters & the dividend, bonus issue, history of the company etc. It’s here to do research before investing.
However investor prefer the mutual fund route.
Besides this, in this LOW RISK & HIGH RETURN.
Who manages investor’s money?
This is the role of asset management company (AMC), to manage investor’s money.
AMC’s in return charges a fee for the services provided & this fee is borne by the investor as it is deducted from the money.
Open-ended funds
An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity.
Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices.
Closed-ended schemes
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years.
The fund is open for subscription only during a specified period.