A BEGINNER'S GUIDE TO MUTUAL FUNDS

WHAT IS A MUTUAL FUND

A mutual fund is a type of financial vehicle

made up of a pool of money collected from

many investors to invest in securities like

stocks, bonds, money market instruments, and

other assets. Mutual funds are operated by

professional Fund Managers who allocate the

fund's assets and attempt to produce capital

gains or income for the fund's investors. A

mutual fund's portfolio is structured and

maintained to match the investment objectives

stated in its prospectus.

ABOUT MUTUAL FUNDS

Mutual funds pool money from the investing public and use that money to buy other securities, usually stocks and bonds.

The value of the mutual fund depends on the performance of the securities it invests in.

when you buy a unit or share of a mutual fund, you are buying the performance of its portfolio or, more precisely, a part of the portfolio's value.

Investing in a share of a mutual fund is different from investing in shares of stock. Unlike stock, mutual fund shares do not give its holders any voting right

Income is earned from dividends on stocks and interest onbonds held in the fund's portfolio. Funds often give investors achoice either to receive a check for distributions or to reinvestthe earnings and get more shares.

If the fund sells securities that have increased in price, the fundhas a capital gains Most funds also pass on these gains toinvestors in a distribution.

If fund holdings increase in price but are not sold by thefund manager, the fund's shares increase in price. Youcan then sell your mutual fund shares for a profit in themarket.

HOW RETURNS ARE EARNED ON MUTUAL FUNDS

WHY SHOULD I INVEST IN A MUTUAL FUND

TransparencyProfessional Management

LiquidityDiversification

Easy Access

PARTIES TO A MUTUAL FUND

TRUSTEE CUSTODIAN

The role of a trustee is to,hold and ensure thatthe funds are actuallymanaged in the interests ofthe investors.

A company appointed by theMutual Fund company tokeep custody of all thesecurities and assets ownedby the fund. The custodianmust either be a bank, or afinancial institution

approved by the SEC.

PARTIES TO A MUTUAL FUND

FUND

MANAGERREGISTRAR

The professional fundmanager appointed by theMutual Fund Company tomanage the fund’sinvestments.

They maintain the register foreach issue of securities.Collecting applications frominvestors with respect of anissue. Proper maintenance ofapplications, and any moniesreceived from investors. toissue and cancel certificates toreflect changes in ownershipof the securities of Investors

KEY TAKEAWAYS

A mutual fund is a type of investment vehicle

consisting of a portfolio of stocks,

bonds, or other securities..

Mutual funds give small or individual investors access to diversified, professionally managed portfolios at a low price.

Mutual funds are divided into several kinds of categories, representing the kinds of securities they invest in, their investment objectives, and the type of returns they seek

QUESTIONS