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Concept of Mutual Funds

Concept of Mutual Funds A mutual fund is a trust that pools the savings of number of investors who share a common financial goal. The money thus collected is than invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and capital appreciations realized are shade by its unit holders in proportion to the number of units owned by them. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. Definition Mutual funds are associations or trusts of public members who wish to make investment in the financial instruments or assets of the business sector or corporate sector for the mutual benefit of its members. The funds collects the money of these members from their saving and invests them in a diversified portfolio of financial assets with a view to reduce risks and to maxi