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 What are Mutual Funds?
Why should I invest in them?
What is SIP?
How does Mutual Fund work?
Various type of Mutual Funds
Mutual Funds FAQs
Videos on Mutual Funds
MUTUAL FUNDS  What are Mutual Funds?
Mutual Funds pool the money of several investors and invest this in stocks, bonds, money market instruments and other types of securities. Why should I invest in them?
Manage Inflation Banks are assumed to be the safest investments by most people but for those who consider inflation seriously, investing in Mutual Funds is the right choice. Expert Managers Investors feel secure as their funds are managed by qualified fund manager who have a dedicated team of market researchers to analyse various schemes and then make informed decisions. Diversification Mutual funds offer investors an opportunity to diversify across assets depending on their investment needs. Liquidity The availability of funds when required is a big attraction as investors can sell their mutual fund units on any business day and receive the current market value on their investments within a short time period. High Returns The option of investing in various industries provides for higher returns in long terms. Transparent approach An investor is provided with updated information about his investment portfolio along with the details of where the money is invested at regular intervals. SEBI regulations also ensure that investments are managed in an efficient manner.  What is SIP? SIP stands for systematic investment plan. As the name suggests, it inculcates the habit of saving in you by auto-debiting certain fixed amount from your bank account at pre determined intervals(e.g. Weekly, monthly, quarterly etc) How it works? You need to give post dated cheques or opt for auto debit form your bank account on pre- determined dates. Certain amount will be auto debited depending on your options chosen E.g. you choose to invest for 6 months; monthly basis for 10,000 then 10,000 will be auto-debited for 6 months Long term goals can be achieved without investing lumpsum using SIP How does Mutual Fund work?
Common Terms - Mutual Funds NAV Net asset value NAV represents the market value of each unit of a fund or the price at which investors can buy or sell units. The NAV is generally calculated on a daily basis, reflecting the combined market value of the shares, bonds and securities (as reduced by allowable expenses and charges) held by a fund on any particular day. Debt Funds Debt Funds help bring stability to your investment portfolio since they are lower in risk as compared to Equity Funds, yet riskier than Liquid Funds and their aim itself is to generate steady returns while preserving your capital. These would typically invest in government securities, NCD, CDs, CPs bonds and other fixed income securities as well as lend money to large organisations or Corporates, in return of a fixed interest rate. Therefore, investing in Debt Mutual Funds would be ideal if you’re looking at a potentially higher return than Liquid Funds over a medium term time horizon, between 3 to 24 months. Sale Price It is the price you pay when you invest in a scheme and is also called "Offer Price". It may include a sales load. Repurchase Price It is the price at which a Mutual Funds repurchases its units and it may include a back-end load. This is also called Bid Price. Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related. Sales Load / Front End Load It is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes which do not charge a load at the time of entry are called ‘No Load’ schemes. Repurchase / 'Back-end' Load - It is a charge collected by a Mutual Funds when it buys back / Repurchases the units from the unit holders. WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names. Mutual Funds can be classified into various categories under the following heads:- (A) ACCORDING TO TYPE OF INVESTMENTS :- While launching a new scheme, every Mutual Fund is supposed to declare
in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme.
Thus, the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows :- B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME : While launching new schemes, Mutual Funds also declare whether this will be an open ended scheme
(i.e. there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up.
Thus, according to the time of closure schemes are classified as follows :- C) ACCORDING TO TAX INCENTIVE SCHEMES: Mutual Funds are also allowed to float some tax saving schemes. Therefore, sometimes the schemes are classified according to this also:- (D) ACCORDING TO THE TIME OF PAYOUT: Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (i.e. dividend etc.). The categories are as follows :- What is a mutual fund?A mutual fund is a financial instrument that collects money from several investors like you, and invests it in various investment options like shares, bonds, etc. This fund is managed by experts. What are the types of mutual funds?Depending on where your money is invested, mutual funds can be classified into three types: Equity, Debt and Hybrid. Equity mutual funds invest in shares of companies listed on the stock exchange. Debt mutual funds invest in bonds of reputed companies and government bonds. Hybrid mutual funds invest in both, shares and bonds. How does a mutual fund operate?A mutual fund company collects money from many investors, and invests it in various options like shares, bonds, etc. This fund is managed by professionals who understand the market well, and try to achieve growth by making strategic investments. Investors get units of the mutual fund according to the amount they have invested. What are the benefits of investing in a mutual fund?Some of the major benefits on investing in a mutual fund are:
- Diversification What is NFO?NFO stands for a New Fund Offer. When a new fund is launched for investors, it is known as a NFO. A NFO could also be the launch of additional units of a close-ended fund. What is a Systematic Investment Plan (SIP)?A Systematic Investment Plan (SIP) is a convenient method of investing in mutual funds. Under this plan, an investor contributes a fixed amount towards the mutual fund scheme at regular intervals, and gets units at the prevailing NAV. WWhat are the benefits of investing in a SIP?Investing in SIP offers two major benefits: - You can start investing with a small amount - You can average out your investment, as SIP involves buying units at different points of time and at different NAV levels What is a Systematic Withdrawal Plan (SWP)?Under a Systematic Withdrawal Plan (SWP), an investor redeems a fixed number of mutual fund units at regular intervals. What is NAV?NAV stands for Net Asset Value of a mutual fund. This is basically the price of one unit of a mutual fund. How often is the NAV of a fund declared?Mutual fund companies have to declare the NAV of their funds at least once a week. However, most companies declare it at the end of every working day. What are gilt funds?A gilt fund is a kind of mutual fund that invest your money only in government securities. These funds are considered to be safe as they bear no default risk. What is an open-ended mutual fund?Open-ended funds can be bought and sold at any time; they have no fixed tenure. What is a close-ended mutual fund?You can buy units of close-ended mutual funds only when a mutual fund company launches the fund. Once you buy them, you have to hold your investment for a fixed tenure. Video links from you tube explaining Mutual Fund
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