Financial Education
The Concept of Mutual Funds
A Mutual Fund is a single portfolio of investments where investors put their money to be managed by an asset management company on behalf of its many investors. This allows each investor access to a professional managed pool of funds.
Fund Manager invests the fund’s capital in profitable avenues and attempt to earn a return for the fund’s investors. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them.
When you invest in a mutual fund, you are essentially buying a share of the fund. Each share represents a portion of the overall portfolio, and the value of each share is determined by the fund's net asset value (NAV) at the end of each trading day. NAV is calculated by dividing the total value of the fund's assets by the number of shares outstanding.
