Introduction to Mutual Funds
Investorline A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instrume nts and…
Why do shares of a close-ended scheme trade at discount to its NAV?
It is important know that the NAV and the market prices of close-ended schemes are never the same. Close-ended schemes always trade at a discount. What explains this discount? And…
What are the different schemes available under mutual funds?
The schemes or funds (often used synonymously) can be classified as : Growth Funds : They promise pure capital appreciation with equity shares. They buy shares in companies with high…
How does one choose the right fund?
A few tips : Acquaint yourself with the fund manager’s investment philosophy. Compare the returns he or she has generated on funds previously managed against funds with similar objectives. Both…
What is entry load and exit load?
The asset management company (AMC) that manages your mutual fund has to spend on people, technology and infrastructure to generate returns. So it recovers part of this regular expenses from…
How safe are Mutual Funds?
Just like any other financial instrument, mutual funds are not without risk. When defined in terms of chances of losing money, the risk in mutual funds is no different than…
What is a Mutual Fund?
A mutual fund collects money from various investors, and then invests this pool in various financial instruments. The fund managers attempt to generate returns superior than what the investors themselves…
How does one calculate the NAV and What does an NAV signify?
Net asset value on a particular date reflects the realisable value of a mutual fund’s portfolio in per share or per unit terms. It is the worth of an investment…
What advantages do mutual funds offer over equity stocks?
Here are a few considerations : Diversification : Most mutual funds spread the money over a number of shares depending on the fund size. This lowers the risk from an…
What is the difference between open-ended and close-ended schemes?
A mutual fund can be either open-ended or close-ended. The difference between the two is in the way each operates after the new fund offering. A close-ended scheme operates like…