Learn before Investing: Basics of Mutual fund

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Hi , Here i going to tell you about different types of investment ideas.Now a days peoples are looking about different investment ideas but everyone scares about loosing their money due to high market volatility. There are so many ideas for investing or saving money . But one of my favorite is Mutual fund. First of all we will discuss about Mutual Fund . Basically mutual fund is a large topic to talk. Let's Talk about Basics of mutual fund.

(1)  What is Mutual Fund?

Mutual Fund is a professionally managed platform that pools money from different investor and invest in market like Stocks,Money market,Bonds and other assets also. And gives return to their investor (who are invested in that fund).

                Investors >>> Fund Manager >>> Invest In Securities >>> Returns(Profit) >>> Pass Back to Investor.

There are different types of mutual fund scheme at different NAV. This NAV goes up and down with market in which fund is invested money.

As a investor , one can buy mutual fund units at its current NAV and be the part of Fund's profit and loss.

(2) History of Mutual Fund?

• UTI (unit trust of India) is  the first fund in India in the year of 1963
• In the Year of 1990, Indian Government allows to public sector bank and institutions to set up mutual fund
• The SEBI was established in the year of 1992 ( SEBI = Security and Exchange Board of India)
• SEBI notified the regulations for the mutual fund in 1993, after that private sector companies started to offer mutual fund.
• The regulation were completely revised and updated in 1996 , Thereafter SEBI issued guidelines to mutual fund from time to time for protect the interest of mutual fund.

(3) Who can invest in mutual fund?  

Mutual fund scheme are open for wide range of investor like Co-operatives society , Trusts , Company , NRI (Non Resident Indian)) etc. 

Students , Farmer , Businessman etc. anyone can invest in mutual fund scheme.

(4) What Is NAV?

NAV means NET ASSET VALUE.

•   NAV is a current market price of one unit of particular mutual fund. for example , NAV of particular fund is 10 $ and you invest 5000$ then you get 500 unit of that fund.
• For open ended scheme NAV is calculated on daily basis and for Closed ended Scheme NAV is calculated on weekly basis.
• NAV is fluctuates with market's UP and DOWN. and it is calculated by deducting of all expenses and charges.
• Growth of the NAV shows the Performance of  that fund. 

  

NAV = (Asstes - Liabilities) / Number of outstanding shares.