Mutual Fund

Mutual fund can be termed as a type of investment company or a form of joint investment. Mutual fund provides comparatively safe investment options to the investors. On the other hand, the returns from the mutual funds are also high.
The mutual funds are actually huge funds where a number of investors invest their money. This huge amount is invested in several projects and companies that can provide desired growth to the money. The mutual funds are managed by the fund managers who are selected from the most experienced professionals in the field of finance.

These fund managers are also termed as the portfolio managers. These people shoulder the responsibility of the mutual fund growth that means the growth of the money. The mutual funds invest money in the stocks, bonds, Forex market and in a number of other investment instruments.

Investments in the mutual funds are safe because the funds are managed by the professionals. These professionals know everything about the market. Because of this, they can plan the best strategy for their investment.
The investment portfolios of mutual funds are kept under observation of the fund managers and whenever it is needed, the portfolio is adjusted. On the other hand, an individual investor, when new in the market, can expose his investments to the market risks and may have to face losses. The mutual fund provides returns that are lower than the stocks, however, the returns are almost safe.

There are a number of mutual funds that are differentiated according to their areas of investment.

Some of these types of mutual funds are as follows:

Open-end fund
Hedge funds
Capitalization
Bond funds
Money market funds
Funds of funds
Equity funds
Exchange-traded funds
Again, the mutual funds are subjected to a different set of rules and regulations regarding administration, tax structure and many more. The mutual funds distribute their income among the investors and because of this, no tax is imposed on the income of the mutual funds. In case of certain types of returns, the income is tax-free for the investors also.

More Information Related to Finance Theory
Finance Concepts Debt Interest Rate
Public Finance Mortgage Loan Discount
Long Terms Financing Yield Curve Arbitrage
Finance Services Company Arbitrage Pricing Credit Derivative
Binomial Options Pricing Model Capital Asset Pricing Model Cox Ingersoll Ross Model
Black Model Black Scholes Model Chen Model
Liquidity Risk Commodity Risk Consumer Credit Risk
Systemic Risk Currency Risk Market Risk
Interest Rate Risk Settlement Risk Equity Risk
Gordon Model Monte Carlo Option Model Ho Lee Model
Rendleman Bartter Model Vasicek Model Hull White Model
Rational Choice Theory Modern Portfolio Theory Cumulative Prospect Theory
Efficient Market Hypothesis Arrow Debreu Model International Fisher Effect
Floating Currency Financial Risk Management Hyperbolic Discounting
Personal Budget Floating Exchange Rate Discount Rate

Last Updated on : 1st July 2013

This website is up for sale at $20,000.00. Please contact 9811053538 for further details.