7 Replies to “What is The Mutual Fund?”

  1. A mutual fund is a type of professionally-managed collective investment vehicle that pools money from many investors to purchase securities.[1] While there is no legal definition of mutual fund, the term is most commonly applied only to those collective investment vehicles that are regulated, available to the general public and open-ended in nature. Hedge funds are not considered a type of mutual fund.
    The term mutual fund is less widely used outside of the United States. For collective investment vehicles outside of the United States, see articles on specific types of funds including open-ended investment companies, SICAVs, unitized insurance funds, unit trusts and Undertakings for Collective Investment in Transferable Securities.


  2. Mutual Fund is an investment program funded by shareholders that trades in diversified holdings and is professionally managed…..

    Thank you


  3. There are three primary types of mutual funds.

    Bond mutual funds will invest in a broad range of investment grade bonds. They are also considered a conservative investment that strives to protect invested principal while paying out regular income. The fund will receive monthly interest payments on the funds underlying securities plus benefit from capital appreciation in the prices of the bonds held. A bond mutual fund will generally have higher yields than money market funds. However, they have higher risk as their value can fall if interest rates rise.

    Balanced mutual funds will invest in a broad diversification of stocks and bonds. They are good for investors looking for a mixture of safety, income, and moderate capital appreciation. Funds invested in just stock or bonds tend to fluctuate more in value. By investing in both at the same time fluctuating prices are less volatile. This is because when the stock market falls, bonds tend to hold value better, and when the stock market rises, bond yields tend to be lower.

    Stock mutual funds will invest in a broad range of stocks and historically have provided the greatest long term growth. Of course, prices are also more volatile from year to year. You may be offered different stock fund options including funds that invest in small/medium/large domestic corporations or even funds that invest overseas.

    It is important to note that mutual funds:
    Are NOT FDIC Insured.
    Are NOT insured by any Federal Government Agency.
    Are NOT deposits or other obligations of, or guaranteed or insured by a bank.
    Involve investment risk, including possible loss of the principal amount invested.


  4. Mutual fund is a medium for accumulating funds by issuing units to the investors and investing funds in stocks, bonds, money market instruments and similar assets in accordance with objectives as disclosed in offer document. Mutual fund units are issued and can typically be purchased or redeemed as needed at the fund’s current net asset value (NAV) per unit.Funds that are low risk invest generally in debt, which is safer than equity investments.An open-end fund is one that is available for subscription all through the year.Growth schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation.
    Investors get more units for the same amount of money in falling markets.
    Investment can be as low as Rs. 500 per month for some funds.

    If an investor puts Rs 1,000 every month in SBI Magnum Emerging Business Fund for five years (Rs 1,000 x 60 months = 60,000) earlier, he would get approximately Rs 1 lakh today, which amounts to 20 per cent returns.


  5. A mutual fund is a type of professionally-managed collective investment vehicle that pools money from many investors to purchase securities. While there is no legal definition of mutual fund, the term is most commonly applied only to those collective investment vehicles that are regulated, available to the general public and open-ended in nature. Hedge funds are not considered a type of mutual fund.


  6. As you probably know, mutual funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. More than 80 million people, or one half of the households in America, invest in mutual funds. That means that, in the United States alone, trillions of dollars are invested in mutual funds.






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