What is a Mutual Fund?

The talks on wealth creation is incomplete without mutual funds.  However, even those who claim to know everything lack clarity over the subject.

Mutual fund is a financial vehicle in which fund managers create a pool of money through contributions from investors to invest in various asset classes. The returns from the investment are equally distributed among investors.

Seek an Expert

If you have lump sum but have no time to make investments but wish to then isn’t it cool that you can seek the service of a professional who can manage your funds for you?

These professionals are known as fund managers.

It is these managers who invest the pool of money in suitable asset classes thanks to their experience and expertise. These asset classes can be debt , equity  or gold or in schemes specifically  for any of these classes. You should also note that the attributes of fund changes with the change in objective.

This process of defining the objective and allocating the funds also rests with the fund manager.

Fund Management Charges

The expenses of managing the fund is deducted from the returns. So, the actual value of a fund is total asset value minus the fund management charges. Likewise, the growth of a fund will be in proportion to the amount invested.

Mutual fund as an investment vehicle when used effectively will fetch great returns. So, seek the help of an expert to ensure best returns for you.