Mutual Fund
Mutual fund is a mechanism for pooling the resources by using units to the investors and investing
funds in securities in accordance with objectives disclosed in offer document. Mutual fund issues
Units to the investors in accordance with quantum of money invested by them.
A Mutual fund is required to be registered with SEBI which regulated securities markets before it
can collect funds from the public.
Advantages:
• Professional Management
• Diversification
• Convenient Administration
• Return Potential
• Low Costs
• Liquidity
Two types of mutual funds:
• Open ended
• Close Ended
Mutual Funds are governed by the SEBI (Mutual Fund) Regulations, 1996
