AMFI Registered Mutual Fund Distributor

Mutual Fund

Mutual funds are a type of certified managed combined investment schemes that gathers money from many investors to buy securities. There is no such accurate definition of mutual funds, however the term is most commonly used for collective investment schemes that are regulated and available to the general public and open-ended in nature. Hedge funds are not considered as any type of mutual funds.

Mutual funds are identified by their principal investments. They are the 4th largest category of funds that are also known as money market funds, bond or fixed income funds, stock or equity funds and hybrid funds. Funds are also categorized as index based or actively managed.

In a mutual fund, investors pay the funds expenditure. There is some element of doubt in these expenses. A single mutual fund may give investors a choice of various combinations of these expenses by offering various different types of share combinations.

The fund manager is also known as the fund sponsor or fund management company. The buying and selling of the funds investments in accordance with the funds investment is the objective. A fund manager has to be a registered mutual fund distributor. The same fund manager manages the funds and has the same brand name which is also known as a fund family or fund complex.

As long as mutual comply with requirements that are established in the internal revenue code, they will not be taxed on their income. Clearly, they must expand their investments, limit the ownership of voting securities, disperse most of their income to their investors annually and earn most of their income by investing in securities and currencies.

Mutual funds can pass taxable income to their investors every year. The type of income that they earn remains unchanged as it gets transferred to the shareholders. For e.g., mutual fund distributors of dividend income are described as dividend income by the investor. There is an exception: net losses that are incurred by a mutual fund are not distributed or passed through fund investors.

Mutual funds invest in various kinds of securities. The various types of securities that a particular fund may invest in are mentioned in the funds prospectus, which explain the funds investments objective, its approach and the permitted investments. The objective of the investment describes the kind of income that the fund is looking for. For e.g., a "capital appreciation" fund generally looks to earn most of its returns from the increase in prices of the securities it holds rather than from a dividend or the interest income. The approach of the investment describes the criteria that the fund manager may have used to select the investments for the fund.

The investment portfolio of a mutual funds investment is continuously monitored by the funds portfolio manager or managers who are either employed by the funds manager or the sponsor.

Advantages of Mutual funds are:

1) Increase in diversification.
2) Liquidity on a daily basis.
3) Professional investment management.
4) Capacity to participate in investments that may be available only for larger investors.
5) Convenience as well as service.
6) Government oversight.
7) Easier comparison

There are different types of Mutual funds as well. Here are some of them.

Open-end funds

In open-end mutual funds, one must be willing to buy back their shares from investors at the end of every business day at the net asset value that is calculated for that day. Most of the open-end funds also sell shares to the public on every business day. These shares are also priced at a particular net asset value. A professional investment manager will oversee the portfolio, while buying or selling securities whichever is appropriate. The total investment in the funds will be variably based on share buying, share redemptions and fluctuation in the market variation. There are also no legal limits on the number of shares that can be issued.

Close-end funds

Close-end funds generally issue shares to the public just once, when they are created via an initial public offering. These shares are then listed for trading on a stock exchange. Investors, who dont wish any longer to invest in the funds, cannot sell their shares back to the funds. Instead, they must sell their shares to another investor in the market as the price they may receive may be hugely different from its net asset value. It may be at a premium to net asset value (higher than the net asset value) or more commonly at a lesser to net asset value (lower than the net asset value). A professional investment manager will oversee the portfolio, in buying or selling securities whichever is appropriate.

Unit Investment Trusts

UIT or Unit Investment Trusts issue shares to the public just once when they are created. The investors in turn can cash in on the shares directly with the fund or they may also sell their shares in the market. UITs do not have any professional investment managers. Their portfolio of securities is established by the creation of the UITs and does not undergo any changes. UITs in general have a limited life span, which is limited at their creation.

  • Market News

At close, the Sensex was down 37.78 points or 0.07% at 54,288.61, while the Nifty settled 51.50 points or 0.32% lower at 16,214.70.
Mon, 23 May 2022 16:15:58 +0530


Welspun Corp, ITC and Hindustan Aeronautics were among the stocks that touched their 52-week high on the BSE
Fri, 20 May 2022 16:53:32 +0530


The Sensex has lost more than Rs 17.59 lakh crore of its market capitalisation in May alone. The mcap was Rs 266.98 lakh crore at the close on April 29 and has now collapsed to Rs 249.38 lakh crore
Thu, 19 May 2022 17:27:03 +0530


Among sectors, Nifty FMCG and Nifty pharma rose a percent each, while Nifty PSU bank, energy and IT indices fell 0.5-1.5 percent
Wed, 18 May 2022 16:25:10 +0530


Among sectors, Nifty FMCG and Nifty pharma rose a percent each, while Nifty PSU bank, energy and IT indices fell 0.5-1.5 percent
Wed, 18 May 2022 16:25:10 +0530


On the BSE, all sectoral indices ended in the green The metal index was up over 7 percent and other sectoral indices rallied between 1-3 percent
Tue, 17 May 2022 16:35:12 +0530


Voltas, HDFC Bank, REC, Lupin, Dixon Technologies and Indus Towers were among the stocks that touched their 52-week low on the BSE
Mon, 16 May 2022 16:32:52 +0530


For the week, the Sensex declined 2,041.96 points, or 3.72 percent, and the Nifty shed 629.05 points, or 3.83 percent
Fri, 13 May 2022 16:47:35 +0530


More than 300 stocks, including Wockhardt, Voltas, Sun TV Network, RBL Bank, Nestle India, Jubilant FoodWorks and IFCI, touched their 52-week low on the BSE
Thu, 12 May 2022 17:04:26 +0530


Over 250 stocks, including Wipro, Torrent Pharmaceuticals, Jindal Saw, Hindustan Zinc, Granules India, Aurobindo Pharma, Ashoka Buildcon, IDFC First Bank, and KEC International, touched their 52-week low on the BSE.
Wed, 11 May 2022 16:36:17 +0530


More than 100 stocks, including SAIL India, Rallies India, Dabur India, Nestle India and Granules India, touched their 52-week low on the BSE
Tue, 10 May 2022 16:43:47 +0530


More than 100 stocks, including SAIL India, Rallies India, Dabur India, Nestle India and Granules India, touched their 52-week low on the BSE
Tue, 10 May 2022 16:43:47 +0530


Broader indices underperformed the benchmarks, with BSE midcap and smallcap indices shedding nearly 2 percent each
Mon, 09 May 2022 17:01:16 +0530


More than 100 stocks, including Wipro, Zomato, Welspun India, Vivimed Labs, Spicejet PNB Housing Finance, Glenmark Pharmaceuticals, touched their 52-week low on the BSE.
Fri, 06 May 2022 16:46:37 +0530


US Fed’s decision to remain less hawkish with a 50 bps rate hike downplayed the investors#39; worries, helping the global markets to rally. Profit booking in the second half led the markets to pare all gains
Thu, 05 May 2022 16:35:54 +0530

Schedule a Meeting With Us