Frequently Asked Questions (FAQs)

A mutual fund is a collective investment vehicle that collects & pools money from a number of investors and invests the same in equities, bonds, government securities, money market instruments.

The money collected in mutual fund scheme is invested by professional fund managers in stocks and bonds etc. in line with a scheme’s investment objective. The income / gains generated from this collective investment scheme are distributed proportionately amongst the investors, after deducting applicable expenses and levies, by calculating a scheme’s “Net Asset Value” or NAV. In return, mutual fund charges a small fee.

In short, mutual fund is a collective pool of money contributed by several investors and managed by a professional Fund Manager.

 Can invest in a variety of securities for a relatively low cost and leave the investment decisions to a professional manager. 

1.  Professional Management .

2.  Risk Diversification 

3.  Affordability & Convenience (Invest Small Amounts) 

4.  Liquidity 

5.  Low Cost 

6.  Well-Regulated  

 7. Tax Benefits 

Under SEBI (Mutual Funds) Regulations, 1996, Mutual Funds are permitted to charge certain operating expenses for managing a mutual fund scheme – such as sales & marketing / advertising expenses, administrative expenses, transaction costs, investment management fees, registrar fees, custodian fees, audit fees – as a percentage of the fund’s daily net assets.

All such costs for running and managing a mutual fund scheme are collectively referred to as ‘Total Expense Ratio’ (TER)

The TER is calculated as a percentage of the Scheme’s average Net Asset Value (NAV). The daily NAV of a mutual fund is disclosed after deducting the expenses.

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Yes. There are various types of Risks in Mutual Fund Investments.  Please click the link below to understand in detail.

https://www.amfiindia.com/investor-corner/knowledge-center/risks-in-mutual-funds.html

Risk Factors: Mutual Fund Investments are subject to market risk, please read Scheme related documents before investing.