10 Replies to “what is mutual fund and how it operates on investment and which one is the best company to invest.?”

  1. Mutual funds are managed pools of money that are invested in stocks, bonds, etc.

    Fidelity is a good company.

    Do not invest without a full understanding of this type of investment.


  2. 1) mutual fund is a pool of different shares/stock of different companies & Sectors.

    2) Its safe to invest in MF than 1company share because, MF comprise of different shares, if 1has loss other might get u huge profit. Only disadvantage of MF is commission & hidden costs.

    3) There are MF companies who purchase shares and pool it into a fund and sell to public. Eg: HDFC Bank, ICICI Bank, Frankline Templeton. I too dont have idea which is the best one to choose because you have to enquire the terms & conditions of policy.

    4) But Check for:
    a)Commissions & Hidden costs, premiums
    b) Return they fetch, (compare with savings/fixed ac),
    c) Period for untill which it should not be distrubed/sold,
    d) Past stats: like Company credibility, MF return in last 1 year


  3. mutual fund is a collective invest scheme. A huge number of investors invest in shares, debentures of companies not directly but through an intermediary i.e. mutual fund company. You can’t in any way control investments made by MF company. income earned by MF is effected by performance of companies in whose shares MF company invwsts. You will be at risk of not earning anything from your investment.
    according to me Mf’s floated by UTI, Birla, Kotak are best.
    Log on to http://www.moneycontrol.com for more details.


  4. In M.F,The companies invest in dif. fields and good,profit making companies.ie., over all profitable n Divident oriented.
    In shares v hv to depend on that particular company only.If
    profits are there ,then only v can get some Dividend.

    In pvt sector, Reliance / Tatas etc.,
    Public sectors LIC .
    M.N.Cs ABN Amro /HSBC etc., are dependable.


  5. ou should know the meaning of mutual funds, before you choose to invest in mutual funds. These funds are a type of security that can be traded on the stock market, allowing shareholders to buy and sell shares in the funds. The revenue generated by purchase of shares is used by mutual fund manager to buy more shares of specific stocks, bonds, and other market securities and money market instruments.

    Since the prices of the stocks, bonds, and other securities held by the mutual fund vary, the value of the fund changes. The average value of every share of the mutual fund is fixed daily based on the total value of the underlying securities held by the fund.

    This involves the shareholders of a mutual fund directly with their investment as against those who just buy individual securities and observe as the prices fluctuate.


  6. In a mutual fund, the capital for investment is collected from different individual investors and then the fund manager invests this amount in different instruments like Stocks, Bonds, Debts etc. If these investments do make some profits, then this profit is distributed amongst the individual investors also.
    The advantage here is that all the investment related research and activities are carried out by the fund manager. The investor does not have to bother about doing research about individual company stocks to invest in, but can gain profits from the experience of the fund manager.


  7. Mutual Funds are managed by fund managers who invest the money of the investors in various equities as per the objective of the fund. Investors who are quite new to the share market can select the mutual fund to invest their money. The performance of the mutual funds vary as per the market conditions. Right now, in India Reliance Diversified Power Sector fund is having the highest growth rate. You can refer, http://www.sharetips4u.info from where I got some useful tips for beginners.


  8. You have the advantages of investing in stocks, bond etc in a pool of companies, by investing in one Mutual Fund. Your fund will be invested by the Fund Manager. It is less riskier than investing directly on stock and you don’t need demat account.
    It is very difficult to choose one best company/fund. There are a good nos of AMC for MF which are doing very well. You may opt for HDFC or ICICI Prudential or SBI.
    But you need to study in this field before you start investing. Read the Magazine of Value Research – Mutual Fund Insight.



  9. A Mutual Fund is a Trust. The Asset Management Company (AMC) collects investments from hords likeminded investors and invests in shares and bonds of various companies listed on the stock exchange. There are fund managers who are experts in investment matters who handles the investments on behalf of the investors. The profit/loss in any is distributed among the investors, in proportion to their investments.

    There are various types of funds – Diversyfied equity funds, Sectoral Funds, Bonds, Securitised funds etc – Close ended and Open ended.
    One can opt for one time investment – in most of the funds it is Rs.5000/- min (ELSS Rs.500).
    One can also opt for SIP (Systematic Investment Plan) – here the investment is on a regular and pre defined manner. One can invest as little as Rs.500/- a month. (Reliance has Rs.100/month as min investment in some schemes).
    MFs are the safest investment option compared to direct stock market investments.
    Any furhter questions are welcome.
    Have a nice day !!





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