Tuesday 8 July 2014

Mutual funds: Safe investment strategies

Mutual funds are known to be the greatest instrument for making money today. Currently, there are a large number of mutual fund schemes in India. Different types of mutual funds available serve different purposes.

Various kind of funds present in the Indian market are closed end funds, open end funds, tax saving funds, equity funds, growth funds, balanced funds and large capital funds. A closed ended mutual fund often behaves more like a stock. Its market value is driven by the supply and demand for the shares. These funds are created by a fund manager that advertises the company to the clients, giving them an opportunity for an exclusive membership.

Closed ended mutual funds are traded on a stock exchange. Also, they have a diversified portfolio of stocks, bonds or a combination of both.  It is a collective investment scheme that has fixed number of shares. It is usually traded at a premium or at a discount to its net asset value. As the name implies, closed ended mutual schemes come with a fixed maturity period. Investors cannot access the money without the completion of the fixed time. Unlike open ended mutual schemes, the investor cannot get his investment back during any emergency.  Investing in closed end mutual funds scheme in the long run can generate good returns on your capital. In this, after the funds are issued, the number of units cannot be increased. However the units can be traded by the market at a premium or at a discount.  To Know more visit http://www.achiieversequitiesltd.com/


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