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Mutual Fund FAQs

Discuss Mutual Fund FAQs within the Stock Markets Tips & Gyan !! forums, part of the Quiz , Marketplace and Community games category; What is Mutual Fund? A mutual fund is a pool of investments managed by professional money managers. When you invest ...

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Mutual Fund FAQs
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Mutual Fund FAQs - March 1st, 2006

What is Mutual Fund?
A mutual fund is a pool of investments managed by professional money managers. When you invest in a mutual fund, you're actually pooling your money with other people who have similar investment goals.

What do Mutual Funds do with the money that they collect from us?
An expert called a Fund Manager invests that money on behalf of the whole group. He invests this pool of investments in securities, ranging from shares to debentures, or a mixture of Equity and Debt, depending on the objective of the scheme.

Mutual Funds manage money collected from individuals/corporate investors based on certain objectives and invest the same in securities (shares, bonds, debentures and call money). Investments are spread over a wide section of industries and sectors to reduce risk. Units are issued to the investor, based on the prevailing Net Asset Value (NAV) and the amount invested.

How is investing in mutual fund different from depositing money in a fixed deposit?
When you deposit money with the bank in its fixed deposit, it promises to pay you a certain rate of interest for a certain specified period of time. On the date of maturity, the bank is supposed to return the principal amount and interest to you. However, in the case of a mutual fund, the money you invest, is in turn invested by the fund manager, on your behalf, as per the investment objectives specified for the scheme. The profit, if any, less expenses, is reflected in the Net Asset Value (NAV) or distrubuted as income to you.

Why should I choose to invest in a Mutual Fund?
If you are someone who does not have the time and expertise to analyse and invest in stocks and bonds, mutual funds offer a viable investment alternative. This is because - Mutual funds diversify the risk by investing in a basket of assets (equity, debt, etc) rather than putting all eggs in one basket. You will have a team of professional fund-managers with in depth research inputs from investment analysts, who will manage your investment. As an individual you may not have the access to critical information for making investments, being large institutions mutual funds have critical information on markets.

The idea behind a mutual fund is simple: Many people pool their money in a fund, which invests in various securities. Each investor shares proportionately in the fund's investment returns -- the income (dividends or interest) paid on the securities and any capital gains or losses caused by sales of securities the fund holds.

Every mutual fund has a manager, also called an investment adviser, who directs the fund's investments according to the fund's objective, such as long-term growth, high current income, or stability of principal. Depending on its objective, a fund may invest in stocks, bonds, cash investments, or a combination of these financial assets.
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Re: Mutual Fund FAQs - May 31st, 2007

thanx dude for this new proj.
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Re: Mutual Fund FAQs - June 1st, 2007

I have some really good projects on mutual funds....
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Re: Mutual Fund FAQs - June 11th, 2007

thanks buddy...
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Re: Mutual Fund FAQs - June 4th, 2008

Iam working on Mutual fund project. Thanks for the info.
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