What is a MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Types of Mutual funds
By Structure
Open-Ended – anytime enter/exit
Close-Ended Schemes – listed on exchange, redemption after period of scheme is over.
By Investment Objective
Equity (Growth) – only in Stocks – Long Term (3 years or more)
Debt (Income) – only in Fixed Income Securities (3-10 months)
Liquid/Money Market (including gilt) – Short-term Money Market (Govt.)
Balanced/Hybrid – Stocks + Fixed Income Securities ( 1-3 years)
Other Schemes Tax Saving Schemes Special Schemes ULIP
