What are Mutual Funds??

-


You might have heard of this word "Mutual Fund" many times on a daily basis.Still some people have some doubts or unaware of want it really means.I want to keep it very simple by giving some examples along the way.

Before going into the discussion i would like you to have a look at Financial Freedom which is kind of a prerequisite to this topic.

You might have heard of Stocks.Stock is a fundamental unit of mutual fund.Stocks are basically the companies which are listed in different Indices and these are being traded on a day to day basis.Based on this their valuation will change. You can get more information on Stocks here.

What is a Mutual Fund?

Mutual Funds as such you can imagine as a collection of Stocks.There can be different stocks belonging to different domain such as Finance,IT,Banks etc in a mutual fund.Fund Managers of the Mutual Fund house decides what stocks to buy and sell on a day to day basis.The variations in the NAV (Net Asset Value) of the mutual fund purely depends on the performance of the stocks that it has in its portfolio and the ability of the fund manager in managing the stocks.

In nutshell when you are buying a mutual fund you are trusting the fund manager of that fund house in managing the stocks on your behalf.For managing the funds mutual fund companies take some commission for their operation and rest of the profit is returned to the investor.This is called as expense ratio.

There are primarily three categories of Mutual Fund these are 
  • Equity
  • Debt
  • Balanced 

Equity Mutual fund mainly invests in Stocks.These can be actively managed stocks or it can be passively managed like in the case of index funds.These are Risky when compared to other two categories.

Debt Mutual fund mainly invests in bond instruments and these are comparatively safest among the three categories.

Balanced is a hybrid of Equity and Debt and the risk in investing in these funds lies between Equity and Debt.

Please do comment your thoughts on which investment options attracted the most😊.

Comments

Post a Comment

Popular posts from this blog

Creating RESTful Minimal WebAPI in .Net 6 in an Easy Manner! | FastEndpoints

-
Image
  We might have developed Web APIs using MVC Controllers where we used to give Route Path Attributes to the Controller and  to identify individual methods we used to provide Actions in the Route. With the Controller approach we need to write boiler plate code in separate files which deals with the Configuration of the Web Service. Those who have worked in Node js would be aware of how easy it is to create a Web API and expose different Endpoints without the need of so much boiler plate code. Here we are going to discuss of similar approach for creating a Web API in .Net6 using FastEndpoints. Under the hood it uses Minimal API concept which tries to reduce the dependencies required to achieve a particular task. This approach is more suitable in the case of Microservice Architecture where we want to keep the dependencies to minimum. Must Read : Fluent API and Data Annotations What are FastEndpoints? FastEndpoints is a Framework compatible with .Net 6 which allows to build a RESTful Web A
Read more

Mastering Concurrency with Latches and Barriers in C++20: A Practical Guide for Students

-
Image
Introduction Picture yourself as a student tasked with organizing a surprise party for a friend. You have a team of friends helping you, each with a specific role: one decorating, another cooking, and yet another taking care of entertainment. As you plan and coordinate, you quickly realize the importance of timing and synchronization. Just as in party planning, in the world of programming and computing, we often have multiple tasks running concurrently, similar to your friends handling different aspects of the party all at once. However, ensuring that these concurrent tasks harmonize can be a significant challenge. If decorations go up before the food is ready or the entertainment starts before guests arrive, it could lead to chaos. This is where the world of programming comes in, and in this blog, we'll explore powerful tools called "latches" and "barriers" to manage these concurrent scenarios efficiently. Learning about latches and barriers isn't just abou
Read more

Graph Visualization using MSAGL with Examples

-
Image
 Graph visualization is a great way to get a better understanding of complex relationships and structures in data. Whether you work as a software developer, a data scientist, or just want to explore networks, seeing graphs at runtime can be really helpful. In this blog, we'll look at how to make graphs at runtime with MSAGL. We'll cover the basics of creating, customizing, and visualizing graphs with MSAGL, as well as practical examples of how it can be used to create a social network and workflow. What is MSAGL? MSAGL, developed by Microsoft Research, is an open-source library designed for graph and diagram visualization. It offers a wide range of features and layout algorithms to create clear and aesthetically pleasing representations of complex graph structures. Installing MSAGL: To begin, you'll need to install the MSAGL library. You can download the latest version from the official MSAGL GitHub repository or conveniently install it using the NuGet package manager in Vi
Read more