| Mutual Funds are a very important financial | | | | of selling back of the units in order to provide an |
| instrument and a comprehensive portfolio of | | | | exit route to the investors. This selling back of |
| stock market shares that are built with funds | | | | the units is taken place by periodic repurchase at |
| from small and mid level investors whose primary | | | | NAV related prices at stock market. An |
| concern is to make a safe investment for the | | | | open-ended mutual fund is available on continues |
| capital. Mutual Funds are usually run by | | | | basis and available for subscription and repurchase |
| government trusts, banks, and some prominent | | | | option. These funds don’t offer any fixed |
| private financial institutions. | | | | maturity period and the investors may buy and |
| Mutual funds are of different kind namely growth | | | | sell units at Net Asset Value (NAV) related prices |
| funds, income funds, balance funds and liquid asset | | | | at their own convenience. Liquidity is the key |
| funds. In financial terms, liquid asset funds also | | | | feature of the open-ended mutual fund schemes. |
| known as Money Market Funds. The mutual fund | | | | Another sort of mutual fund scheme is growth / |
| schemes could be classifieds into two schemes. | | | | equity oriented scheme. These kinds of funds are |
| The first one is open ended and other one is | | | | meant to provide capital appreciation for short or |
| close ended. Both these schemes depend upon | | | | long period. These funds comparatively carry high |
| the respective maturity period. The closed- ended | | | | risk factors and offer different options like |
| mutual fund enjoys a fixed maturity period of | | | | dividend option, capital appreciation to the |
| around 5-7 years in a single stretch. The | | | | investors. Index funds are another kind of mutual |
| subscriptions for this fund usually open during a | | | | fund schemes that replicate the portfolio of a |
| specified time period. The potential investors for | | | | particular index like BSE sensitive index and Nifty. |
| this kind of mutual funds may invest in this | | | | Another fund called gilt fund is basically to invest in |
| scheme on the time of IPO and later they can | | | | government securities that has no default risk at |
| buy the units from any of the stock market | | | | all. These schemes sometimes fluctuate due to |
| where the units are properly listed. | | | | change in interest rates and other economic |
| Some close-ended funds provide an opportunity | | | | factors in global marketplace. |