What is a MUTUAL FUND? How I can invest in a mutual fund..?

Question

I Live in INDIA and I am not a accounts student. I want to know what is a MUTUAL FUNDS and how It helps to earn money please help me by giving all the possible details..

Answer 1

A security that gives small investors access to a well-diversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Shares are issued and can be redeemed as needed.

The fund's net asset value (NAV) is determined each day. Each mutual fund portfolio is invested to match the objective stated in the prospectus.

You may walk in to any Mutual Fund office and fill up an application form, give your PAN (Permanent Account Number) if investment exceeds Rs. 50,000/- and write a cheque for the invested amount.

You may contact a financial advisor or consultant for guidance.
It has been shown in study after study that a majority of mutual funds fail to beat the market. Also, picking mutual funds purely on the basis of past performance usually does not work.

A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund.

You can make money from a mutual fund in three ways:
1) Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all of the income it receives over the year to fund owners in the form of a distribution.
2) If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution.
3) If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit.

Answer 2

MUTUAL FUND, as the name suggests, is a corpus fund (say, Rs.500 crore) which is created when various people (investors) like u put in money in a common pool of some mutual fund company for investment in a lucrative business or industry or any profitable venture. The money is then invested by special managers for the purpose called fund managers. U cannot decide where the money will be invested.

Let us understand like this. Suppose that Amar is starting a factory and he needs additional capital. He approaches his friends and gets help from each one of them and when his business flourishes he returns them their money along with a proportion of his profits. BUT, when big businesses or Governments start a project, they need capital in excess of thousands of crores and they cannot get it from few friends. So they need to borrow it from general public and in turn share a proportion of the profits with them according to the proportion of the amount lent or invested by each one of the people from public.

But when big businesses or governments ask for your money for a new project or expansion of an existing project u are not sure whether the new venture will yield profits enough or make outright loss. Only those who can invest a great deal of time reading and understanding about the new venture can know about the destiny of their investments- profits or loss. HERE STEPS IN THE MUTUAL FUNDS. They appoint full time professionals for researching, studying and understanding the economic viability of such projects and then invest accordingly where profits are assured or investments are safe.

When u put in money in a mutual fund what u do is that u buy a NAV or a part of its Net Asset Value. Based on the investments of the mutual funds in different companies the value of the NAV (that u have bought) goes up or down. Your wealth will increase if the NAV increases and u can sell the NAVs when u think u can.

There r different mutual funds (about 40-50) in India, public and private, and u can find about them easily. Most of the banks have their own mutual fund schemes, SBI, ICICI, UTI etc.

Answer 3

A mutual fund is a collection of various stocks and equities combined into a single entity with a certain end-result in mind depending upon the level of risk you're willing to invest in. It can go up and down like a stock does in value, but the combining makes it a less volatile option than say going with one single stock.

Answer 4

Mutual money are a element of the previous. the charges to head into, to go out, and to maintain take a super type of the revenue. Over $1T have left mutual money and are not invested in ETF's. greater handy to alter ETF's and the charges are so much less. under no circumstances purchase Mutual money by using an entire provider broking provider.

Answer 5

Its a savings plan...for your retirement. Invest in one at the bank you deal with. There are many different mutual funds so get a financial adviser to help you chose one that suits you.

Answer 6

It isnot good to put all ur eggs in one basket. Similarly it is not desirable to have all investments at one place-it must be a diversified portfolio.Since a layman is not aware of all investment avenues at a time, he can handover his investible funds to professionals like MFunds who make investments on ur behalf along with others collectively.There are somany MFs in INDIA today.

Answer 7

You would be interested in visitng this indian investment website that caters the needs of investors and NRIs (non resident Indians) when it comes to investing in india and the indian stock markets, as well as indian mutual funds..

http://www.nriinvestindia.com/



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Answer 8

go and invest karvy.its no 1 in india financial services & advices.

Answer 9

it is composed of a host of ether stocks bonds or both. talk to a broker.

Answer 10

GO TO SITES LIKE MONEYCONTROL.COM AND ICICIDIRECT.COM