Mutual funds

The Unit is just as shares represent the extent of equity ownership in a company, units represent your extent of ownership in a mutual fund.

Investing in shares or debentures of any company is very difficult because you never know when their prices will be high or low ?? So there is a lot of risk, so to reduce some risk in shares and debentures there is concept of investing in mutual funds. In short you invest in mutual funds of a company and that company invest your money in shares and debentures of various companies and earn profit from them, and some part of profit earned by that company results in increase in value of mutual fund units that are hold by you, so in this way you earn profit. So it is like INDIRECTLY investing in shares and debentures. You invest in mutual funds and company invest you money in shares and debentures and makes profit from them and return some profit to you. The best thing i like about mutual funds is that it can be hold in fraction also like 400.6 or 5021.7 etc etc.

Definition of unit can be “Just as shares represent the extent of equity ownership in a company, units represent your extent of ownership in a mutual fund”. I came across unit when I opted for SIP from Birla Sun Life Mutual Fund and I am pretty happy with the range of benefits they are offering.

Unit is a quantity on mutual funds. I agree it represents your extent of ownership in a mutual fund.

Rabindra has summed up pretty well about unit mutual fund. I only know that mutual fund is a collection of bonds or stocks.

When you start off with your investing dreams in mutual funds, you tend to come across the term NAV a lot. 

 

 

 

https://holisticinvestment.in/blog/what-you-need-to-know-about-mutual-fund-nav/

 

 

 

Regards

Ramalingam K, MBA, CFP,

Director and Chief Financial Planner,

Holistic Investment Planners

“Best Performing Financial Advisor Award” Winners from CNBC TV18

www.holisticinvestment.in

 

In Short, Mutual fund is an investment programme funded by shareholders that trades in diversified holdings and is professionally managed.

 

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