Live Market Watch
Mutual Fund

A mutual fund is not an alternative investment option to stocks and bonds, rather it pools the money of several investors and invests this in stocks, bonds, money market instruments and other types of securities.

Buying a mutual fund is like buying a small slice of a big pizza. The owner of a mutual fund unit gets a proportional share of the fund’s gains, losses, income and expenses

Each mutual fund has a specific stated objective

The fund’s objective is laid out in the funds prospectus, which is the legal document that contains information about the fund, its history, its officers and its performance.


Managed by an Asset Management Company (AMC)

The company that puts together a mutual fund is called an AMC. An

AMC may have several mutual fund schemes withsimilar or varied investment objectives.

The AMC hires a professional money manager, who buys and sells securities in line with the funds stated objective.


All AMCs Regulated by SEBI, Funds governed by Board of Directors

The Securities and Exchange Board of India (SEBI) mutual fund regulations require that the fund’s objectives are clearly spelt out in the prospectus.

In addition, every mutual fund has a board of directors that is supposed to represent the shareholders interests, rather than the AMC’s.


Net Asset Value or NAV 

NAV is the total asset value (net of expenses) per unit of the fund and is calculated by the AMC at the end of every business day.   


How is NAV calculated?

The value of all the securities in the portfolio in calculated daily. From this, all expenses are deducted and the resultant value divided by the number of units in the fund is the fund’s NAV.  The following video will help you to understand easily on pricing of NAV...


Expense Ratio

AMCs charge an annual fee, or expense ratio that covers administrative expenses, salaries, advertising expenses, brokerage fee, etc. A 1.5% expense ratio means the AMC charges Rs1.50 for every Rs100 in assets under management.

A funds expense ratio is typically to the size of the funds under management and not to the returns earned. Normally, the costs of running a fund grow slower than the growth in the fund size - so, the more assets in the fund, the lower should be its expense ratio.


Some AMCs have sales charges, or loads, on their funds (entry load and/or exit load) to compensate for distribution costs. Funds that can be purchased without a sales charge are called no-load funds.

Types of Funds    

Open- and Close-Ended Funds

1) Open-Ended Funds

At any time during the scheme period, investors can enter and exit the fund scheme (by buying/ selling fund units) at its NAV (net of any load charge). Increasingly, AMCs are issuing mostly open-ended funds.

2) Close-Ended Funds

Redemption can take place only after the period of the scheme is over. However, close-ended funds are listed on the stock exchanges and investors can buy/ sell units in the secondary market (there is no load).     


Important documents

Two key documents that highlight the funds strategy and performance are

1) the prospectus (legal document) and

2) the shareholder reports (normally quarterly).         

Why Invest through Mutual Fund


Professional Money Management

Fund managers are responsible for implementing a consistent investment strategy that reflects the goals of the fund. Fund managers monitor market and economic trends and analyze securities in order to make informed investment decisions.    



Investors can sell their mutual fund units on any business day and receive the current market value on their investments within a short time period (normally three- to five-days).


The minimum initial investment for a mutual fund is fairly low for most funds (as low as Rs500 for some schemes).


Most AMCs provide you the convenience of periodic purchase plans, automatic withdrawal plans and the automatic reinvestment of interest and dividends.

Mutual funds also provide you with detailed reports and statements that make record-keeping simple. You can easily monitor the performance of your mutual funds simply by reviewing the business pages of most newspapers or by using our highly powerful software


Diversification is one of the best ways to reduce risk. Mutual funds offer investors an opportunity to diversify across assets depending on their investment needs.

Flexibility and variety

You can pick from conservative, blue-chip stock funds, sectoral funds, funds that aim to provide income with modest growth or those that take big risks in the search for returns. You can even buy balanced funds, or those that combine stocks and bonds in the same fund.


Tax benefits on Investment in Mutual Funds

1) 100% Income Tax exemption on all Mutual Fund dividends

2) Equity Funds - Short term capital gains is taxed at 15%. Long term capital gains is not applicable.

 Debt Funds - Short term capital gains is taxed as per the slab rates applicable to you. Long term capital gains tax to be lower of - 10% on the capital gains without factoring indexation benefit and 20% on the capital gains after factoring indexation benefit.

3) Open-end funds with equity exposure of more than 65% (Revised from 50% to 65% in Budget 2006) are exempt from the payment of dividend tax for a period of 3 years from 1999-2000.

 Equity Funds are those where the investible funds are invested in equity shares in domestic companies to the extent of more than 65% of the total proceeds of such funds


Schedule a Meeting With Us


Latest News

Reading his way to riches: Journey of a printer salesman to a successful trader and investor When author George RR Martin of Game of Thrones fame said a reader lives a thousand lives before he dies, he probably had Nishant Arora in mind. A computer engineer with an MBA in marketing Arora has literally read his way up in life going through various professions.
Sat, 24 Feb 2018 19:01:27 +0530

Committed to double income of farmers by 2022: Union minister Union Minister Parshottam Rupala today said the Centre was making concerted efforts to double the income of farmers by 2022 and asked scientists, and others concerned to tackle the challenges being faced by the agriculture sector.
Sat, 24 Feb 2018 18:45:30 +0530

Passports of Nirav Modi, Mehul Choksi revoked The passports of diamantaire Nirav Modi and owner of Gitanjali Gems Mehul Choksi, the main accused in the Rs 11,400 crore PNB scam, have been revoked, external affairs ministry sources said today.
Sat, 24 Feb 2018 18:35:28 +0530

PM to take part in golden jubilee celebrations of Auroville On his maiden visit to Puducherry after assuming office, Prime Minister Narendra Modi will participate in the golden jubilee celebrations of Auroville International township at neighbouring Villupuram district tomorrow.
Sat, 24 Feb 2018 18:25:28 +0530

Attempts to drive wedge between party, cadres won#39;t work: CM A day after an AIADMK MLA switched loyalty to dissident leader TTV Dhinakaran, Tamil Nadu Chief Minister K Palaniswami today said attempts to drive a wedge between cadres and the party won#39;t work.
Sat, 24 Feb 2018 18:25:28 +0530

Adani Group to invest over Rs 9K cr in AP projects Adani Group today signed an agreement with the Andhra Pradesh government to invest over Rs 9,000 crore in various projects, including development of a greenfield port at Bhavanapadu, in next five years.
Sat, 24 Feb 2018 18:17:29 +0530

Cong promises to enhance Centre#39;s health insurance cover The Congress in Meghalaya today released its poll manifesto, promising to enhance the Rs 5 lakh health insurance cover announced by the Centre, if re-elected to power in the state.
Sat, 24 Feb 2018 18:01:30 +0530

Maharashtra minister#39;s car attacked in Solapur district Maharashtra minister Sadabhau Khot#39;s car was attacked at Ridore village in Solapur district by alleged supporters of the Swabhimani Shetkari Sanghatana (SSS), his former organisation, today morning, police said.
Sat, 24 Feb 2018 17:59:29 +0530

Korean firm pledges Rs 90,000 crore investment in UP Korea based Worldbestech company would invest Rs 90,000 crore in Uttar Pradesh in various projects such as gas-based power plant, cold storage and food processing, a top company official said today.
Sat, 24 Feb 2018 17:57:28 +0530

ICSI to come out with auditing standards for professionals The Institute of Company Secretaries of India (ICSI) today said it is set to introduce auditing standards for practicing company secretaries.
Sat, 24 Feb 2018 17:41:29 +0530

Madras HC summons Chennai Collector on contempt plea The Madras High Court has summoned a senior government official on a contempt petition filed against him for allegedly not complying with its order to pay compensation to the owner of a property which was acquired for the construction of MRTS here three decades ago.
Sat, 24 Feb 2018 17:35:28 +0530

Weekly market wrap: Global indices close in green; India VIX falls more than 13% The Indian benchmark indices closed on a positive note for the week with the Sensex gaining 0.39 percent while the Nifty was up 0.37 percent. On a weekly basis, Nifty made a Dragonfly Doji kind of pattern which suggests that a reversal in the trend could be in the offing.
Sat, 24 Feb 2018 17:33:05 +0530

COAI rebuts Jio; says flagged issue on TRAI orders Industry body COAI today returned fire in the ongoing stand off with Reliance Jio, saying its "differences" are with regulator TRAI#39;s orders, not with a specific operator, and it is duty-bound as an association to raise concerns on growth of the sector.
Sat, 24 Feb 2018 17:29:29 +0530

Protest march against PM denied, Cong releases black balloons The opposition Congress today released hundreds of black balloons to protest against Prime Minister Narendra Modi after police stopped them from carrying out a march to the venue of the Prime Ministerial programme.
Sat, 24 Feb 2018 17:15:28 +0530

Saudi Aramco looking to buy stake in existing Indian refineries World#39;s largest oil company Saudi Aramco is looking to buy a stake in existing Indian refineries and expansion projects as well as the planned giant refinery on the west coast, Saudi Arabian Oil Minister Khalid al-Falih said today.
Sat, 24 Feb 2018 16:59:28 +0530