What is Mutual Fund ? Here’s Everything You Need To Know

We indians are always be very  careful when it comes to about the penny.

We can do anything to get it more and more.It could be psychological attraction or dedication towards money but It is also a fact that penny powers us and we work only for it.The word money is associated with our birth to till we die. The current era on finance  sector is booming,there are N numbers of private and government investment companies which are giving a chance to double the money in certain period of time.

Today we came with a very interesting topic to give the  complete A to Z knowledge of Mutual Fund.

Mutual Fund :

When Banks are not giving enough return and interest rates are also very low  then Mutual fund gives a smart way to invest money in Share Market without directly touch within the stocks.The amount deposited by a large number of investors is called a mutual fund.

The fund manager uses their smart management techniques to invest it, in various  financial assets or in instruments. We can invest mutual funds in kind of ways ,there are risks and returns are fixed.

When a large number of investors came together and invest a huge amount of money in a single fund ,then manager divides the fund into equal parts as well,these small parts of fund is called Unit.

Lets have an example to better understanding of funds :

Just suppose that there are few friends who came together to buy a piece of  land.they have fund of 100K and The amount of the land is fixed at 100K/acres.

Now if  we sell the land in 10rs/units then there will be 10K unites will be made,investors could buy the units as per their capacity.if you have only 1K then you can buy 100 units of that land and like this you will be landlord with respect to the investment amount.

Now after a month the investment amount of 100K increased by 120K,if we calculate this amount per unit then the 10 rs/unit values is incremented upto 12 rs/unit.The investor who bought 100 units by 1000 rs,their investment has gone upto 100 X 12=1200 RS.

Being an investor, its fully dependent on you that how much amount you have invested and how much units you got.therefore an investor could also known as boss of a Unit.  The amount you will get,it will be completely tax free. As you can see how a person who have not big amount of money could invest in small units and become an owner.

Another advantage of mutual fund is that is not hacetic,people leave their money to experts of stocks and get tension free returns. Experts will be take care of you money they know how to invest smartly where and when .

We can invest in Mutual fund in many terms .one of the most important is term of investing is stock market and another are Golds or any other assets. Funs have also their own types with regards to the investment value,DATE,EQUITY and BALANCED are some examples of fund.EQUITY is so much different than other fund.

Conclusion:

Now days mutual funds has become very popular and people are investing in it the reason is it’s easy and simple to invest.

Mutual funds are complete subject to market risk if the value of share will be high you will get what you have not expected yet else the value of share will be low the you won’t know what you will lose. Before investing please read all related documents carefully.