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Mutual Fund Introduction
A trust pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instrument such as shares, debentures and other securities. The income earned from this investment and capital appreciation realized are shared 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. Meaning – Mutual-Fund means a fund established in the form of a trust, for the purpose of raising money by issue of units and investing in securities (including money market). Governed By – It is governed by SEBI. Previously we had a guidance note – ‘’Accounting for Investment in Financial Statements of Mutual-fund’’ (This has now been withdrawn)
What is Mutual Fund
A mutual-fund is a common pool of money into which investors place their contributions that are to be invested in accordance with a stated objective. A Mutual-Fund is the most suitable investment for the cautious investors as it offers an opportunity to invest in a diversified professionally managed basket of securities at a relatively low cost. Mutual-fund is a type of passive investment. If investors directly investment in market is known as active investment. Recommended Articles
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