Mutual fund management India collects money for buying stocks and securities

Mutual fund management India collects money for buying stocks and securities. In layman’s terms it is a collection of bonds, stocks, shares etc which people collectively buy. Here the group of people has same interests and hence they invest together by chipping in some amount. It works like a company. The investor who invests something is his share and whatever the returns are the group shares.

Mutual fund management deals in four types of mutual funds. They are:

·         Exchange traded funds

·         Open end funds

·         Closed end funds

·         Unit investment funds

Each has its own specialty. For example, in an open end fund, the funds are supposed to buy their shares from the investor on the closing time of the business at its net asset value (NAV).

Mutual fund management India helps earn money from mutual fund in many ways. Now since the investment is done on stocks and shares, the incomes are also on them. Income is earned through interest on stocks, shares and other investments and dividends on bonds.  There is also investment done in securities. So if the income is in that it is distributed. It is a capital gain. This happens only when there is an increase in the security price. When the market is in a good position, the funds increase their price. And if these are held by the manager till that time and are sold at appropriate time, then there can be good earnings.

Mutual fund management India has many advantages. The advantages are:

·         Mutual funds can be converted into cash. Liquidity of these funds is a great advantage.

·         Mutual funds help in diversifying the risks. If you want a huge gain, then it is essential that you invest in many stocks and bonds. The reason behind this is very simple. For example, you have invested in a bond whose marker price becomes high. Here you can earn a lot. But at the same time there may be a bond whose price dips wherein you can register a loss. The gain here helps in neutralizing the loss effect. Hence diversification becomes a plus point. Hence, Mutual fund management is a preferred option among many people today.

Mutual fund management though has disadvantages also.