how does mutual fund work

how does mutual fund work

how does mutual fund work

how does mutual fund work

when someone mentions mutual fund complicated not actually let us explain how a mutual fund works

Ok this is how it works investors like as in money to form a mutual fund and Asset Management Company or AMC is appointed to manage the money according to reduce goals the AMC as professional people understand how market and money work and then there are trustees of mutual fund keep monitoring the AMC is activities to ensure that investors interest are protected the AMC is take your money and invest in stocks and fixed income in SMS not given that stock market and non market have ups and downs there is no escape from that fact to reduce risk the Asset Management Company does a very smart thing for equity investments they go and invest in not one but several directories

This ensures that even if one stop doesn't perform well the better performing stocks that it would that investments they invest in various security risk debt funds when teamed with equity investment in diverse Industries make for a great investment combo it has the growth of equity investment and stability of dabt . all these factors make mutual fund investments less risky than a common man investing in equity and debt Italy and more beneficial.

OK what happens after you invest in mutual funds once your money is invested in mutual fund

you are than given units which represent the money invested in the fund easy to get back your money and they are generally mentioned along with

nav net asset value of a mutual fund represents the value of 1 unit of your investment stock fund expenses and management fees of it so whenever you feel like taking the market value of your investment you simply need to multiply the given any number of you hold you can invest in mutual fund ine Ellam on small bits for systematic investment plan called as this makes beautiful fund accessible for anyone salaried entrepreneurs Businessman anyone you can know more about it in our video on advantages of SAP investment doing well not so well how do you know you see every fund has a fixed benchmark to measure performance benchmark could be part of the Nifty Sensex to judge the performance of your fund you need to check out the fund is formed against the benchmark that for its measurement the fund managers task is to analyse the market and crossfit benchmark of the fund this is exactly why we pay fund managers Mutual Funds can open many benefits like diversification liquidity professional management Low charges.