Introduction to Mutual Funds
They are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of assets, such as stocks, bonds, money market instruments, or other securities. A professional fund manager oversees the fund, selecting assets and managing the portfolio to achieve the fund's stated investment objectives. Key Terms Net Asset Value (NAV): It is the per-share value of a mutual fund, calculated by dividing the total net assets of the fund by the number of outstanding shares. Fund Size / Assets Under Management (AUM): It is the total market value of assets that a mutual fund manages on behalf of its investors. (The total amount invested by investors) Asset Management Company (AMC) / Fund House: It is the financial institution responsible for managing mutual funds. It hires fund managers, analysts, and other professionals to make investment decisions and manage fund portfolios. Ex. HDFC AMC, ICICI Prudential AMC, and SBI Mutual Fund Dividend Plan: The mutual fund pays out a portion of its profits (from interest, dividends, or capital gains) to investors at regular intervals.