It means having enough money to fund your lifestyle, as well as work toward your financial goals.

It refers to pools of money collected from many investors for the purpose of investing in stocks, bonds, or other securities.

Mutual funds are managed by professionals. Who are these professionals?

They establishes the fund and registers the fund with the SEC before the security can be sold.

They are known as the fund underwriter.

They are the promoter of mutual funds.

is a holding service who has administrative power for managing the money, property or assets used in mutual funds.

Who can be the trustees in mutual funds?

It is a person who acts as a custodian for the assets held within a Trust

AMC

AMC of one mutual fund cannot be an AMC or trustee of another fund. AMCs cannot engage in any business other than that of financial advisory and investment management

Classifications of Mutual Funds

Classification Based on Structure

Classification Based on Investment Objective

Classification Based on Investment Style

• No fixed maturity date • Accept continuous sale and re-purchase requests—can buy or sell anytime • Transactions are NAV-based (Net Asset Value)—price changes daily • Unit capital is not fixed

• Run for a specific period • Offered in a New Fund Offer (NFO) but are closed for further purchases after NFO • Unit capital is kept constant

• Variant of closed-ended funds bu here you can BUY BACK or redeem MF. • Becomes open-ended at specific intervals • Have to be mandatorily listed

• Invest in short and long term debt instruments (bonds) • Aim to provide regular income • Low risk, steady return

• Invest in equity securities (stocks) • Aim to provide growth and capital appreciation over long term • High risk, high return

• Invest in a combination of equity and debt securities (stocks and bonds) • Proportion of equity and debt may vary • Aim to provide for both income and capital appreciation.

Investment must not below 75%

Investment is below 75%

• Replicate a market index • Invest in same securities and in same proportion as that of index • No active selection of any stock / sector • Expenses are lower • Portfolio is modified every time index composition changes.

• Invests in securities and sectors that may offer a better return than the index • Actively manage the allocation to market securities and cash • May perform better or worse than the market index • Incur a higher cost than passive funds

Common Types of Mutual Funds MFEBIS

• This type of fund invest in short-term fixed-income securities. • These types of funds are generally a safer investment but with a lower potential return than other mutual funds.

• It buys investments that pay a fixed rate of return. • This type of mutual fund focuses on getting returns coming into the fund primarily through interest.

This type of fund invest in stocks.

Different types of equity funds: such as funds that specialize in growth stocks, value stocks, large-cap stocks, mid-cap stocks, small-cap stocks, or a combination of these stocks.

This type of fund invest in a mix of equities and fixed-income securities – typically in a 40% equity 60% fixed income ratio. • The aim of these funds is to generate higher returns but also mitigate risk through fixed-income securities.

• This type of fund aim to track the performance of a specific index. For example, the S&P, or TSX • It follows the index and go up when the index goes up and goes down when the index goes down. • These are popular as they typically require a lower management fee compared to other funds (due to the manager not needing to do as much research).

• This type of fund focus on a very small part of a market such as energy, telecommunications, healthcare, industrials, etc.

Mutual funds are actively managed by a professional who constantly monitors the fund’s portfolio. In addition, the manager can devote more time selecting investments than a retail investor would.

an individual or financial intermediaries that helps in buying and selling investments or in managing investment or funds

Those financial goals may include retirement, education, income protection, and important life milestones.

It is their sole strategy of weathering emergencies and meeting their future needs.

Investing in mutual funds provides an easy way to participate in the stock market and other investment markets. Anyone with a stable income or extra cash can start doing it.

Mutual Funds are pools of money collected from many investors for the purpose of investing in stocks, bonds, or other securities. Mutual funds are owned by a group of investors and managed by professionals. In other words, a mutual fund is a collection of securities owned by a group of investors and managed by a fund manager.

• Common pool of funds contributed by investors and invested in accordance to the objectives. • Investments are held in a trust of which the investors alone are the joint beneficial owners. • Trustees oversee the management by investment manager.

• Mutual funds are ideal for investors who either lack large sums for investment, or for those who neither have the inclination nor the time to research the market, yet want to grow their wealth. • The money collected in mutual funds is invested by professional fund managers in line with the scheme's stated objective.

• When you purchase a mutual fund, you are pooling money with other investors. • The money pooled together by you and other investors are managed by a fund manager who invests in financial assets such as stocks, bonds, etc. • The mutual fund is managed on a daily basis.

An investment firm which is registered with the SEC and complies with certain stated legal requirements.

It is a trust that pools the savings of a number of investors who share a common financial goal. It collects the savings from the small investors, invest them in government and other corporate securities and earn income through interest and dividends, besides capital gains.

There are different ways that you can invest your money. This is one of the attractive features that mutual funds have to offer.

Mutual funds are managed by full-time, professional fund managers who have the expertise, experience, and resources to actively buy, sell, and manage investments. The fund managers do the research, select the securities and monitor the performance all for the benefits of the investors.

The saying “ do not put all your eggs in one basket” perfectly fits mutual funds as spreading investment across multiple securities and asset categories lowers risk. Mutual funds are inherently diversified.

Mutual Fund investors can easily redeem their shares at any time, for the current net asset value (NAV) plus any redemption fees. Also, funds can be withdrawn or redeemed to meet any emergency.

Mutual Fund investors can easily redeem their shares at any time, for the current net asset value (NAV) plus any redemption fees. Also, funds can be withdrawn or redeemed to meet any emergency.

Mutual funds can help investors access the financial market's growth opportunities. Low-risk mutual funds are those investment options that carry minimal risk and a stable return assurance.

An investor protection fund may compensate investors for losses in the event of the bankruptcy of an investment dealer or a mutual fund dealer. It does not cover losses resulting from the changing market value of securities, unsuitable investments, or the default by an issuer of securities.

Switching of funds means moving the money from an investment scheme to another investment scheme.

With a long-term investment in mutual funds, you can pay less taxes due to their high tax efficiency. In mutual fund, you can also get income tax deductions by investing in specific funds while earning high returns.

Because a mutual fund buys and sells large amounts of securities at a time, its transaction costs are lower than what an individual would pay for securities transactions. A mutual fund can invest in certain assets or take larger positions than a smaller investor could.

Mutual funds are also affordable for every earning individual. You need to pay a small amount, known as the expense ratio, to your fund houses to invest in mutual funds and the costs are less than other managed funds.

There is an increase in capital goods, labor force, technology, and human capital can all contribute to economic growth. Mutual funds offer diversification or access to a wider variety of investments than an individual investor could afford to buy. Investing with a group offers economies of scale, decreasing your costs.