March 07, 2019

Mutual funds, NAV,ETF,SIP,BSE,NSE,SEBI,ETFs,Lock in period, Financial lease,ELSS,

What is mutual funds
Mutual funds: Mutual funds is a component that collects saving from investors for investment purposes. Mutual funds invest in the financial market. Mutual funds is safe procedure for investment. The following points needs to know about mutual funds which came under same category of investment through mutual funds- * Mutual funds gives transparent dealing and managed by professionally. * Mutual funds contains high liquidity proceduer, simple sale procedure, and tax saving options in the investment. Mutual funds is regulated by SEBI since 1996, the first mutual funds is Unit trust of India (UTI) set up in 1963. 

Types of mutual funds:
Mutual funds are two types - close ended funds and open ended funds.
Closed ended funds: closed ended funds works for certain period.  
Open ended funds: open ended funds works for all time for providing sale and repurchases. Mutual fund investment plan: The most important investment plan of mutual funds is systematic investment plan (SIP). On the basis of SIP you can (I) Invest small amount of money on the regular interval.

 Lock in period: The period during which the funds from investment accounts are not allowed to be withdrawn by investors. It is already mentioned before investment in mutual funds. Minimum lock in period  3 year for mutual funds while for the banks  minimum lock in period is 5 year.
  ELSS: it is tax saving scheme, full name Equity linked saving scheme, lock in period 3 year. 
Gilt funds: related to government securities. 
Indexation: it is procedure to value an assets at current prices linked to its purchases price. 
Net assets value( NAV): NAV is the total market value of the assets of a mutual funds scheme.  
Repurchases price in mutual : the price unit at which the open ended funds are repurchased. 
Redemption price in mutual funds: The price unit at which close ended funds are paid on maturity. 
 Association of mutual funds in India (AMFI): AMFI is the body of mutual funds that protect the interest of mutual funds and investors.  
Index funds: related to sensex, Nifty.  
Sector funds: related to sector specific like banking, reality, industrial, infrastructure etc.
 Income funds: related to bonds of corporate and government. 
Growth funds: related to equity stocks. 
Balance funds: related to equity and debt. 
Money market funds: related to financial or money market. 
Delisting of Shares: Delisting occurs When companies decide to buyback their own shares voluntary is called delisting of shares.
 Financial lease: Financing high cost equipments at a lesser cost compared to term loans called financial lease, it is generally used by customer on payment of lease rentals for the banks with ownership right remaining within the lessor. 
Exchange Traded Funds (ETF): ETF is the funds that works as a stock exchange, it is open for investment during the time duration that the stock exchange is open and functioning .  ETF tracks indexes like Nifty, BSE,Banking index etc. ETF enables investors to create customized portfolios in line with their risk taking power or ability and time horizons.  Using ETFs the investors gain benefits which is not possible in open ended mutual funds.        
SEBI:Securities and exchange board of India is established in 1988, and  given statuary power on 12th April 1992. Head quarter- Mumbai (Bandra-kurla complex).
BSE: Bombay stock exchange, established in 1875, head quarter- Mumbai. Index of BSE is sensex  , 30 companies are listed in BSE.        
  NSE: National Stock exchange established on 3rd November in 1994, head quarter- Mumbai.                

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