Basics of Mutual Fund

Mutual Fund is a process of collecting a money from people through mutual funds applications like GROW, PAYTM MONEY, Etc. and investing in Equity, Stock market Etc. in that investment they made returns in the same returns they keep 1-3% profit for management expenses. And no knowledge is required to invest in the mutual fund.  

Advantages of Mutual Fund

• Simple to Invest
• Professionally Managed
• Offers Diversification
• Conveniently Administered
• Gives Higher Returns
• Low-Cost Management
• Offers Liquidity
• Provides Transparency
• Highly Regulated
• Allows to Switch to others Account

TYPES OF MUTUAL FUNDS

1. Equity Funds or Growth
2. Debt Funds
3. Balanced or Hybrid Funds
4. Money Market funds

Why The people purchasing mutual funds?

why the people are selecting a mutual funds the reason as listed below.

Professional Management>  The Mutual fund managers do the research for investors who invest the money in their mutual funds. and they will invest the money in different composes stocks, debts.

Affordability>  Most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases.

Liquidity>  Investors who invest money in mutual funds they can easily withdraw them money at any time for the current value of the shares. 

People who involved in Mutual Funds?

Share Holders :-  Who are the invest in mutual funds.

Mutual fund  Management Company (MMC):- An Mutual fund Management Company has a manager who is a specialist in analyzing the share market activity on a day-by-day basis. the sponsors will appoint the managers.  and they both sign a agreement and the entire responsibility is the manager.

Trustees :- As a legal entity the mutual fundi's trust in India and these trust is governed by its own trustees and he is the overall responsible to safeguarding the funds of investors. the group of people will appoint as the trustees and they called a board of directors. they are in charge of the overall activity of the company.   and they will appoint the different key managers. The Trustee should also ensure that the compliance handbook is prepared and that internal control mechanisms, such as internal audit systems, are designed.

Custodian :- The custodian is in charge of the fund's assets. The custodian must accept and deliver securities for the purchase and sell transactions of the fund's various schemes as part of this responsibility. As a result, the custodian is responsible for settling all transactions on behalf of the mutual fund schemes.

Sponsors:- A Sponsor establishes the Mutual Fund along with any individual/body corporate. A minimum of 40% of the AMC's net worth must be contributed by the sponsor. Furthermore, anyone who owns 40% or more of the net worth of the AMC's stock is deemed a sponsor, and must consequently meet the eligibility conditions outlined above. Sponsors must deposit a minimum of Rs.1,00,000 to the mutual fund's corpus as an initial commitment.

Transfer Agents :- Registrars or transfer agents are trusts or institutions that register and keep full records of investor transactions for mutual fund firms' convenience.

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