Mutual Fund. A mutual fund is a pool of money from numerous investors. the money deposited in the fund is professionally managed in diversified portfolios which could consist of stocks, bonds, money market instruments or a combination of those. Mutual funds permit an individual to invest small amounts of money, but they can benefit from being part of a large pool of cash invested by other people and share in the fund s gains and losses proportionately to the amount theyve invested. Mutual Fund had different objectives and its own set of goals which is taken into consideration when deciding which stocks and bonds should be in the funds portfolio.Depending on investment objectives, funds are broadly classified in the following 5 types: 1. Aggressive growth. It means investing into stocks which have a chance for dramatic growth and may gain value rapidly. But this type of investing carries a high element of risk also. 2. Investing in a mixture of large-, medium- and small-sized companies. The fund portfolio chooses to invest in stable, well established, blue-chip companies together with a small portion in small and new businesses. 3. Balanced funds. It is a combination of growth and income funds. They have a mix of goals. They seek to provide investors with current income while still offering the potential for growth. Growth and income funds have a low-to-moderate stability along with a moderate potential for current income and growth. 4. Income funds. These funds invest in a number of fixed-income securities. This will provide you with regular income. Retired investors could benefit from this type of fund because they would receive regular dividends. 5. Money market mutual fund. It aims at maintaining capital preservation and could be slightly higher than that of bank deposits. These funds are highly liquid . contd...
Posted on: Fri, 09 Jan 2015 15:59:51 +0000
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