Mutual Funds


 
 
Concept Explanation
 

Mutual Funds

It is a body corporate registered with SEBI (Securities Exchange Board of India) that pools money from individuals/corporate investors and invests the same in a variety of different financial instruments or securities such as equity shares government securities, bonds debentures etc. Mutual funds can thus be considered as financial 1ntermedianes in the investment business that collect funds from the public and invest on behalf of the investors.

  • Mutual funds issue units to the investors. The appreciation of the portfolio or securities in which the mutual fund has invested the money leads to an appreciation in the value of the units held by investors.
  • The investment objectives outlined by a mutual fund in its prospectus are binding on the Mutual Fund Scheme. The investment objectives specify the class of securities. A mutual fund can invest in various asset classes like equity, bonds debentures, basics of financial markets.
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