WHY MUTUAL FUND?

What is the meaning of MF?

A mutual fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

Which body regulates mutual funds in India?

 Mutual funds in India are regulated and monitored by the Securities and Exchange Board of India (SEBI), which strives to protect the interests of investors.

What is a mutual fund in simple terms?

A mutual fund is a kind of investment that uses money from many investors to invest in stocks, bonds or other types of investment. A fund manager (or "portfolio manager") decides how to invest the money, and for this he is paid a fee, which comes from the money in the fund.

What are the different types of mutual funds?

Money market funds. These funds invest in short-term fixed income securities such as government bonds, treasury bills, bankers' acceptances, commercial paper and certificates of deposit. They are generally a safer investment, but with a lower potential return then other types of mutual funds.

How do mutual funds work?

Some mutual funds focus on a single asset class, such as stocks or bonds, while other invest in a variety. Unlike the stock market, in which investors purchase shares from one another, mutual funds shares are purchased directly from the fund (or a broker that purchases them directly from the fund).

What is Association of Mutual Funds in India?

The Association of Mutual Funds in India (AMFI) is an industry standards organisation in India in the mutual funds sector. It was formed in 1995. Most mutual funds firms in India are its members.

What does AMFI do?

The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain standards in all areas with a view to protecting and promoting the interests of mutual funds and their unit holders.

How many mutual funds are there in the world?

In the United States, there were 9,511 mutual funds in 2016, managing assets worth approximately 16.34 trillion U.S. dollars. Domestic equity funds constituted 42 percent of the fund market in the United States in 2016. The second most popular were bond funds, with 22 percent of the market share.

What is an example of a mutual fund?

How it works (Example): Mutual funds may include investments in stocks, bonds, options, futures, currencies, treasuries and money market securities. Depending on the stated objective of the fund, each will vary in regard to content and risk. Funds issue and redeem shares on demand at the fund's NAV, or net asset value.

Why are mutual funds?

A mutual fund holds a variety of investments which can make it easier for investors to diversify than through ownership of individual stocks or bonds. Not all investments perform well at the same time. ... This is known as diversification

What is a Mutual Fund PDF?

A mutual fund is an SEC-registered open-end investment company that pools money from many investors and invests the money in stocks, bonds, short-term mon- ey-market instruments, other securities or assets, or some combination of these investments.

What is equity funds and debt funds?

Definition of 'Debt Funds' Definition: Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills. Gilt fund, monthly income plans (MIPs), short term plans (STPs), liquid funds, and fixed maturity plans (FMPs) are some of the investment options in debt funds.

Can you withdraw money from a mutual fund?

Although penalties for withdrawing from mutual funds are often associated with retirement accounts, some non-retirement investments can have penalties for withdrawing money as well. Some mutual funds charge a redemption fee, which is a percentage of the amount that you withdraw by selling shares.

How do you make money from a mutual fund?

Investors typically earn a return from a mutual fund in three ways: Income is earned from dividends on stocks and interest on bonds held in the fund's portfolio. Afund pays out nearly all of the income it receives over the year to fund owners in the form of a distribution.

What are the mutual funds in India?

A mutual fund is not an alternative investment option to stocks and bonds, rather it pools the money of several investors and invests this in stocks, bonds, money market instruments and other types of securities. Buying a mutual fund is like buying a small slice of a big pizza.

Which is the largest mutual fund organization in India?

UTI Mutual Fund is promoted by the four of the largest Public Sector Financial Institutions as sponsors, viz., State Bank of India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank with each of them presently holding an 18.5% stake in the paid up capital of UTI AMC.

Which is the best mutual fund in India?

• ICICI Prudential Exports and Other Services Fund.
• L&T India Value Fund.
• Principal Emerging Bluechip Fund.
• SBI Magnum MultiCap Fund.
• UTI MNC Fund.
• Birla Sun Life Advantage Fund.
• Franklin India Flexi Cap Fund.
• ICICI Prudential Value Discovery Fund.

Are mutual funds safe?

It is so very lucrative that it has the magnetic effect of luring more and more investors. Though mutual fund is considered as a safe way of investing for return, the underlying fact is that none of the mutual funds are safe though all mutual funds are safe.