Introduction To Mutual Funds
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Mutual Funds
A link between the investor and the securities market by mobilizing savings from the investors and investing them in the securities market to generate returns The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions.
WORKING OF MUTUAL FUNDS
u t u al f u n d :
r g a n i s a t i o n a l s e t u p o f a
Terminologies
Sponsor : It’s like the promoter of the company as it get the funds registered with SEBI. Unit Value: The unit value of the fund is struck by adding up the values of all the investments at their market prices, subtracting amounts owed by the fund and dividing by the number of units held. Trustee: Holds the property for the benefit of the unit holders. Custodian: who is registered with SEBI, holds the securities of various schemes of the fund in its custody AMC’s : Manages the funds by making investments in various types of securities.
Reliance Mutual Fund
Sponsor : Reliance Capital Limited Trustee: Reliance Capital Trustee Co. Ltd. Investment Manager: Reliance Capital Asset Management Ltd.
Frequently used terminologies
Sale Price: It’s the price you pay when you invest in a scheme. Also called Offer Price. Repurchase Price: It’s the price at which a close-ended scheme repurchases its units and it may include a backend load. This is also called Bid Price. Redemption Price: It’s the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related. Sales Load :It’s a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’ schemes. Repurchase or ‘Back-end’ Load : It’s a charge collected by a scheme when it buys back the units from the unit holders.
Basic Questions in Mind!
How to invest in a scheme of a mutual fund? How much should one invest in debt or equity oriented schemes? How to know the performance of a mutual fund scheme? How to know where the mutual fund scheme has invested money mobilized from the investors?
A link between the investor and the securities market by mobilizing savings from the investors and investing them in the securities market to generate returns The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions.
WORKING OF MUTUAL FUNDS
u t u al f u n d :
r g a n i s a t i o n a l s e t u p o f a
Terminologies
Sponsor : It’s like the promoter of the company as it get the funds registered with SEBI. Unit Value: The unit value of the fund is struck by adding up the values of all the investments at their market prices, subtracting amounts owed by the fund and dividing by the number of units held. Trustee: Holds the property for the benefit of the unit holders. Custodian: who is registered with SEBI, holds the securities of various schemes of the fund in its custody AMC’s : Manages the funds by making investments in various types of securities.
Reliance Mutual Fund
Sponsor : Reliance Capital Limited Trustee: Reliance Capital Trustee Co. Ltd. Investment Manager: Reliance Capital Asset Management Ltd.
Frequently used terminologies
Sale Price: It’s the price you pay when you invest in a scheme. Also called Offer Price. Repurchase Price: It’s the price at which a close-ended scheme repurchases its units and it may include a backend load. This is also called Bid Price. Redemption Price: It’s the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related. Sales Load :It’s a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’ schemes. Repurchase or ‘Back-end’ Load : It’s a charge collected by a scheme when it buys back the units from the unit holders.
Basic Questions in Mind!
How to invest in a scheme of a mutual fund? How much should one invest in debt or equity oriented schemes? How to know the performance of a mutual fund scheme? How to know where the mutual fund scheme has invested money mobilized from the investors?
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