{"id":377,"date":"2022-10-04T17:03:10","date_gmt":"2022-10-04T17:03:10","guid":{"rendered":"http:\/\/familyfirstventures.in\/?page_id=377"},"modified":"2023-12-27T03:37:30","modified_gmt":"2023-12-27T03:37:30","slug":"mutual-fund","status":"publish","type":"page","link":"https:\/\/familyfirstventures.in\/index.php\/mutual-fund\/","title":{"rendered":"Mutual Fund"},"content":{"rendered":"\t\t
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Mutual Fund \/ SIP<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A type of certified managed combined investment schemes that gathers money from many investors to buy securities.<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Mutual funds are a type of certified managed combined investment schemes that gathers money from many investors to buy securities. There is no such accurate definition of mutual funds, however the term is most commonly used for collective investment schemes that are regulated and available to the general public and open-ended in nature. Hedge funds are not considered as any type of mutual funds.<\/p>

Mutual funds are identified by their principal investments. They are the 4th largest category of funds that are also known as money market funds, bond or fixed income funds, stock or equity funds and hybrid funds. Funds are also categorized as index based or actively managed.<\/p>

In a mutual fund, investors pay the funds expenditure. There is some element of doubt in these expenses. A single mutual fund may give investors a choice of various combinations of these expenses by offering various different types of share combinations.<\/p>

The fund manager is also known as the fund sponsor or fund management company. The buying and selling of the funds investments in accordance with the funds investment is the objective. A fund manager has to be a registered investment advisor. The same fund manager manages the funds and has the same brand name which is also known as a fund family or fund complex.<\/p>

As long as mutual comply with requirements that are established in the internal revenue code, they will not be taxed on their income. Clearly, they must expand their investments, limit the ownership of voting securities, disperse most of their income to their investors annually and earn most of their income by investing in securities and currencies.<\/p>

Mutual funds can pass taxable income to their investors every year. The type of income that they earn remains unchanged as it gets transferred to the shareholders. For e.g., mutual fund distributors of dividend income are described as dividend income by the investor. There is an exception: net losses that are incurred by a mutual fund are not distributed or passed through fund investors.<\/p>

Mutual funds invest in various kinds of securities. The various types of securities that a particular fund may invest in are mentioned in the funds prospectus, which explain the funds investments objective, its approach and the permitted investments. The objective of the investment describes the kind of income that the fund is looking for. For e.g., a “Capital Appreciation” fund generally looks to earn most of its returns from the increase in prices of the securities it holds rather than from a dividend or the interest income. The approach of the investment describes the criteria that the fund manager may have used to select the investments for the fund.<\/p>

The investment portfolio of a mutual fund’s investment is continuously monitored by the fund’s portfolio manager or managers who are either employed by the fund’s manager or the sponsor.<\/p>

Advantages of Mutual funds are:<\/h5>

1) Increase in diversification.
2) Liquidity on a daily basis.
3) Professional investment management.
4) Capacity to participate in investments that may be available only for larger investors.
5) Convenience as well as service.
6) Government oversight.
7) Easier comparison<\/p>

Disadvantages\u00a0of Mutual funds are:<\/h5>

1) High fees.
2) Less control over timing of recognition of gains.
3) Much lesser predictable income.
4) No opportunity for customization.<\/p>

There are different types of Mutual funds as well. Here are some of them.<\/p>

Open-end funds<\/h5>

In open-end mutual funds, one must be willing to buy back their shares from investors at the end of
every business day at the net asset value that is calculated for that day. Most of the open-end funds also
sell shares to the public on every business day. These shares are also priced at a particular net asset
value. A professional investment manager will oversee the portfolio, while buying or selling securities
whichever is appropriate. The total investment in the funds will be variably based on share buying, share
redemptions and fluctuation in the market variation. There are also no legal limits on the number of
shares that can be issued.<\/p>


Close-end funds<\/h5>

Close-end funds generally issue shares to the public just once, when they are created via an initial public
offering. These shares are then listed for trading on a stock exchange. Investors, who dont wish any
longer to invest in the funds, cannot sell their shares back to the funds. Instead, they must sell their
shares to another investor in the market as the price they may receive may be hugely different from its
net asset value. It may be at a premium to net asset value (higher than the net asset value) or more
commonly at a lesser to net asset value (lower than the net asset value). A professional investment
manager will oversee the portfolio, in buying or selling securities whichever is appropriate.<\/p>


Unit Investment Trusts<\/h5>

UIT or Unit Investment Trusts issue shares to the public just once when they are created. The investorsin turn can cash in on the shares directly with the fund or they may also sell their shares in the market.
UITs do not have any professional investment managers. Their portfolio of securities is established by
the creation of the UITs and does not undergo any changes. UITs in general have a limited life span,
which is limited at their creation.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Our Service<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Giving You Financial Power<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Give shape to your investments with our powerful tools & invest now.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\n Equity <\/h3>\n \t\t \t

Equity market is a place where stocks and shares of companies are traded. The equities that are traded in an equity market are either over the counter or at stock exchanges.<\/p>\n

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\n Commodity <\/h3>\n \t\t \t

A commodity market is a marketplace where investors trade several commodities like spices, energy, precious metals, crude oil within a country.<\/p>\n

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\n Currency <\/h3>\n \t\t \t

This is a type of marketplace that will fix the exchange rate for the currencies. <\/p>\n

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\n Mutual Fund <\/h3>\n \t\t \t

A type of certified managed combined investment schemes that gathers money from many investors to buy securities.<\/p>\n

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\n Health Insurance <\/h3>\n \t\t \t

A health insurance policy extends coverage against medical expenses incurred owing to accidents, illness or injury.<\/p>\n

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\n Life Insurance <\/h3>\n \t\t \t

Life Insurance insures an individual against the risk of financial loss in case of death. It does not include a savings plan.<\/p>\n

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\n Taxation <\/h3>\n \t\t \t

When a governmental authority imposes levies on citizens and business organizations<\/p>\n

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\n PMS <\/h3>\n \t\t \t

PMS aims to cater to the investment needs of individuals or entities with high net worth value by providing them with investment solutions.<\/p>\n

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\n Loan <\/h3>\n \t\t \t

A sum of money borrowed from banks or other financial institutions<\/p>\n

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Family First Ventures is trusted by more than 10,000 Families across
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Prioritize your financial goals with a customized financial plan!<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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What They Say<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tVery friendly, practical, honest and realistic. FFV has helped me in many aspects of our future. Thanks\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t
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\n\t\t\t\t\t\tIt is such a relief to have someone who knows what they are doing to help with investments and planning for the future. Family First Ventures really thought about their business and how they want to look after their clients. \n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t
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\n\t\t\t\t\t\tI would highly recommend their services to anyone in need of wealth management services.\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t
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FAQ<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Frequently asked questions.\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n \n \n What is a Mutual Fund?<\/span>\n\n \n
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A Mutual Fund is a body corporate registered with the Securities and Exchange Board of India (SEBI), that pools up the money from individual \/ corporate investors and invests the same on behalf of the investors \/unit holders, in equity shares, Government securities, Bonds, Call money markets etc., and distributes the profits. In other words, a mutual fund allows an investor to indirectly take a position in a basket of assets.

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\n \n \n Why has the concept of mutual funds taken so long to pick up in India?<\/span>\n\n \n
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Even in the US the concept of mutual funds has started picking up only in the last decade. This whole process of investor education and investor awareness takes a lot of time. But Indian investors are now beginning to understand the benefits of investing through the mutual funds route and hence the collections are beginning to pick up.<\/p> <\/div>\n\n <\/div>\n\n <\/div>\n\n \n

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\n \n \n What is the Regulatory Body for Mutual Funds?<\/span>\n\n \n
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Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual funds mentioned above. All the mutual funds must get registered with SEBI. The only exception is the UTI, since it is a corporation formed under a separate Act of Parliament.<\/p> <\/div>\n\n <\/div>\n\n <\/div>\n\n \n

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\n \n \n Why should I choose to invest in a mutual fund?<\/span>\n\n \n
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For a retail investor who does not have the time and expertise to analyze and invest in stocks and bonds, mutual funds offer a viable investment alternative. This is because:<\/p>