Hence, technically speaking, a mutual fund is an investment vehicle which pools investors’ money and invests the same for and on behalf of investors into stocks, bonds, money market instruments and other assets. The money is received by the AMC with a promise that it will be invested in a particular manner by professional managers (commonly known as fund managers). The fund managers are expected to honour this promise. The SEBI and the Board of Trustees ensure that this actually happens.
These funds are available for subscription throughout the year. These funds do not have a fixed maturity. Investors have the flexibility to buy or sell any part of their investment at any time, at the prevailing price (Net Asset Value – NAV) at that time.
Contributing for novices resembles figuring out how to swim. Not suggested: bouncing in a tough situation in uneven waters off the shoreline of Maine in January to get familiar with the butterfly stroke. Proposal: figure out how to skim first, getting your face wet under quiet clear water.
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