mutual funds
This query is : Resolved
08 December 2008
what are open ended and close ended schemes of mutual funds
CA Vivek Jain
(Expert)
08 December 2008
What is a close-ended mutual fund scheme?
A close-ended mutual fund scheme clearly stipulates the maturity period, which could be anywhere between 2 to 15 years of time. You can make investments on a close-ended mutual fund scheme as soon as they are issued. Later on, you are free to buy or sell close-ended mutual fund scheme units when they are listed on the stock exchange.
A close-ended mutual fund scheme clearly stipulates the maturity period, which could be anywhere between 2 to 15 years of time. You can make investments on a close-ended mutual fund scheme as soon as they are issued. Later on, you are free to buy or sell close-ended mutual fund scheme units when they are listed on the stock exchange.
CA Vivek Jain
(Expert)
08 December 2008
What are open-ended mutual fund schemes?
Open–ended schemes usually do not have a fixed maturity period and are available for subscription and redemption on an ongoing basis. The units can be bought and sold any time during the life of the scheme at NAV related prices.
Open–ended schemes usually do not have a fixed maturity period and are available for subscription and redemption on an ongoing basis. The units can be bought and sold any time during the life of the scheme at NAV related prices.
CA Vivek Jain
(Expert)
08 December 2008
Open-ended schemes can issue and redeem units any time during the life of the scheme while close-ended schemes cannot issue new units except in case of bonus or rights issue. Hence, the number of units of an open-ended scheme can fluctuate on a daily basis while that is not the case for close-ended schemes. Another way of explaining this difference is that new investors can join the scheme by directly applying to the mutual fund at applicable net asset value related prices in case of open-ended schemes while that is not the case in case of close-ended schemes, where new investors can buy the units from secondary market only.
CA Vivek Jain
(Expert)
08 December 2008
What are the different types of Mutual Funds?
Mutual Funds are classified by structure in to (a) Open - Ended Schemes (b) Close-Ended Schemes (c) Interval Schemes and by objective in to (a) Equity (Growth) Schemes (b) Income Schemes (c) Money Market Schemes (d) Tax Saving Schemes (e) Balanced Schemes, (f) Offshore funds (g) Special Schemes like index schemes etc
Mutual Funds are classified by structure in to (a) Open - Ended Schemes (b) Close-Ended Schemes (c) Interval Schemes and by objective in to (a) Equity (Growth) Schemes (b) Income Schemes (c) Money Market Schemes (d) Tax Saving Schemes (e) Balanced Schemes, (f) Offshore funds (g) Special Schemes like index schemes etc
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