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This document discusses various types of mutual funds and their key characteristics. It defines mutual funds as investment vehicles that pool money from investors to purchase securities like stocks, bonds, and debt. Income funds prioritize current income through investments in bonds, fixed income, and dividend stocks/shares. Mutual funds are managed by investment managers, registrars, brokers, and other roles. Balanced funds invest in a mix of equities and debt. Benefits of mutual funds include diversification, professional management, and easy buying and selling. Gilt funds exclusively invest in government securities. Risk and return profiles vary depending on the type of fund. Eligible investors include banks, trusts, insurance companies, and individuals. Mutual funds generally offer better
This document discusses various types of mutual funds and their key characteristics. It defines mutual funds as investment vehicles that pool money from investors to purchase securities like stocks, bonds, and debt. Income funds prioritize current income through investments in bonds, fixed income, and dividend stocks/shares. Mutual funds are managed by investment managers, registrars, brokers, and other roles. Balanced funds invest in a mix of equities and debt. Benefits of mutual funds include diversification, professional management, and easy buying and selling. Gilt funds exclusively invest in government securities. Risk and return profiles vary depending on the type of fund. Eligible investors include banks, trusts, insurance companies, and individuals. Mutual funds generally offer better
This document discusses various types of mutual funds and their key characteristics. It defines mutual funds as investment vehicles that pool money from investors to purchase securities like stocks, bonds, and debt. Income funds prioritize current income through investments in bonds, fixed income, and dividend stocks/shares. Mutual funds are managed by investment managers, registrars, brokers, and other roles. Balanced funds invest in a mix of equities and debt. Benefits of mutual funds include diversification, professional management, and easy buying and selling. Gilt funds exclusively invest in government securities. Risk and return profiles vary depending on the type of fund. Eligible investors include banks, trusts, insurance companies, and individuals. Mutual funds generally offer better
A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates 2. What are Income funds? Income funds are mutual funds or ETFs that prioritize current income, often in the form of interest or dividend-paying investments. Income funds may invest in bonds or other fixed-income securities as well as preferred shares and dividend stocks. 3. Who manages the Mutual Fund? The people who manage the Mutual fund are classified as follows:- The sponsors, acting through the trustees, appoints all the functionaries Investment Managers, known as AMC Registrars and Transfer Agents Brokers Selling agents and distributors Custodians Bankers Legal Advisors Auditors Depository participants
4. What are the balanced funds?
These funds invest both in equity and debt instruments in some proportion. It is suitable for investors who are conservative and have long term orientation.
5. What is the importance of Mutual Funds
Built-in diversification When you buy a mutual fund, your money is combined with the money from other investors and allows you to buy part of a pool of investments. Professional management You may not have the skills and knowledge to manage your investments or want to spend the time. Mutual funds allow you to pool your money with other investors and leave the specific investment decisions to a portfolio manager. Portfolio managers decide where to invest the money in the fund, and when to buy and sell investments. Easy to buy and sell Mutual funds are widely available through banks, financial planning firms, investment firms, credit unions, and trust companies. You can sell your fund units or shares at almost any time if you need to get access to your money. But you may get back less than you invested. A wide range of funds to choose from A young investor with a stable income and many years to invest may feel comfortable taking more risk to achieve a greater potential return. They may invest in an equity fund. A mid-career investor trying to balance risk and return more moderately could invest in a balanced mutual fund that buys a mix of stocks and bonds. 6. What are the Gilt Funds? Gilts are government securities with medium to long term maturities, typically of more than one year. Since these funds invest only in securities that are issued by the government, therefore they do not carry any credit risk. 7. Fund Suitability – Risk vs Returns Stages of Risk Vs Returns are as follows:- Liquid Income Balanced Diversified Sector 8. What are the categories of investors eligible to buy MF Units? The categories of investors eligible to buy MF units are given as follows:- Banks Indian trusts and charitable institutions Insurance companies NBFC’S Provident funds Non – residents Indians Resident Individuals Indian Companies 9. Bank vs Mutual Funds BANKS MUTUAL FUNDS Returns Low Better Administrative expenses High Low Risk Low Moderate Investment option Less More Network High penetration Low but improving Liquidity At a cost Better Quality of Assets Non-transparent Transparent Interest calculation A minimum balance between Everyday 10th & 30th of every month