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CP - 13 Mutual Funds

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43 views27 pages

CP - 13 Mutual Funds

Uploaded by

rishikasomani2002
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Working of ror ru (—) e- 7 Securities Hence, a Mutual Fund is a trust registered with the SEBI which pools up the mone fe individual or corporate investors and invests the same on behalf of the investors or unit halle Generates in equity shares, government securities, bonds, call money market and so on. The income sim! through these investments and the capital appreciations realised are shared by its unit holders proportion to the number of units owned by them. This pooled income is profession managed on behalf of the unit-holders and each investor holds a proportion of the portiolio. G DEFINITIONS OF MUTUAL FUND = | “A mutual fund is a trust that pools number of savings investors, who shares common! goal.” -Association of Mutual Fundsi ___ “A mutuai fund is a financial service organization that receives money from invests it, eams retums on it, attempts to make it grow and agrees to pay the share demand for the current value of his investment.” -Investment Company “A mutual fund is established in the form of a trust to raise money through the S#it the public or @ section of the public under one or more schemes for investing If including money market instruments.” -SEBI (Mutual Funds) fund is a trust. 1 ‘Mutual fund pools money from a group of investors called unit holders. ‘The investors share common financial goals. . Motual fund invests the money, collected from small investors into securities like 4 bond etc. It is called as diversified investment. 5, Mutual funds use professional expertise on investment made. 4, Asset classes of investments match the stated investment objectives of the scheme. 7. Incomes and gains from the investments are passed on to the unit holders based on the ; proportion of the number of units they own. ote) in Oa Investors : Every investor has a certain inclination to take risk given his financial Position and personal disposition. It would be possible for the investor to earn an incremental return by taking an incremental risk. Mutual fund is an option for Investors who lack the time, inclination or the skills to actively manage their ‘nvestment risk in individual securities. Investors delegate this role to mutual fund while retaining the right and obligation to Monitor their investments in the scheme. Investing through a mutual fund would make “conomic sense for an investor if his investment earns a return that is higher than ‘aming through direct investment. — ‘Asset Management Company. AMC mar z employs a large number of experts and investment ‘research and agent servicing. AMC brings new ‘ ar ey layed by AMC in the functioning of mutual f, 1. : vu and guidance of the trustees. ‘under the ent fees for the schemes which is calculated aa ‘assets managed. AMC has to employ people. It bears all the establ; net elated to its functioning such as for the buildings, furniture, “ish that are a Trustees : A significant link in the function of any mutual fund is trustees 4 : i suring that interests of investors in a scheme are take

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