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| What is Mutual Funds? |
| 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 invested by the fund
manager in different types of securities depending
upon the objective of the scheme. These could
range from shares to debentures to money market
instruments. The income earned through these investments
and the capital appreciation realized by the scheme
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 portfolio
at a relatively low cost. The small savings of
all the investors are put together to increase
the buying power and hire a professional manager
to invest and monitor the money. Anybody with
an investible surplus of as little as a few thousand
rupees can invest in Mutual Funds. Each Mutual
Fund scheme has a defined investment objective
and strategy. |
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| Types of Mutual Fund Scheme |
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| Mutual fund schemes may be classified
on the basis of its structure and its investment
objective |
- By Structure
- By Investment Objective
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| Other Schemes |
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- Tax Saving Schemes
- Special Schemes
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| Benefits of Investing
in Mutual Funds |
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| Benefits
of mutual fund investing are liquidity, affordability,
diversification, convenience and professional
management. Mutual fund investment provides liquidity.
Investors can sell their mutual fund units on
any business day and receive current market value
on their investments. |
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| How to invest in Mutual
Fund |
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| Investment
done in mutual fund is known as mutual fund investing.
Mutual funds investing require a vision for the
market that encompasses many contingency plans. |
| There are generally four types
of mutual fund investing: |
| Step One - Identify
your Investment needs |
| Step Two - Choose
the right Mutual Fund |
| Step Three - Select the ideal mix of Schemes |
| Step Four - Invest
regularly |
| Step Five- Start
early |
| Step Six - The
final step |
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| Rights of a Mutual Fund
Unitholder |
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| A unit holder in a Mutual Fund
scheme governed by the SEBI (Mutual Funds) Regulations,
is entitled to some rights. |
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| Mutual Funds - A Globally
Proven Investment |
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All
investments whether in shares, debentures or deposits
involve risk. Share value may go down depending
upon the performance of the company, the industry,
state of capital markets and the economy. Generally
however, longer the term, lesser the risk. Companies
may default in payment of interest and principal
on their debentures/bonds/deposits. While risk
cannot be eliminated, skillful management can
minimize risk. Mutual Funds help to reduce risk
through diversification and professional management.
The experience and expertise of Mutual Fund managers
in selecting fundamentally sound securities and
timing their purchases and sales help them to
build a diversified portfolio that minimizes risk
and maximizes returns.
Worldwide, the Mutual Fund, or Unit Trust as it
is called in some parts of the world, have almost
overtaken bank deposits and total assets of insurance
funds. As of date, in the US alone there are over
5,000 Mutual Funds with total assets of over US
$ 3 trillion (Rs.l00 lakh crores). In India there
are 38 Mutual Funds and over 300 schemes with
total assets of approximately Rs. 100,000 crores.
All mutual funds in India are regulated by the
Securities and Exchange Board of India (SEBI) |
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| Please contact us for more details. We will be happy to help you. |
