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| What are funds? |
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| A fund is a scheme that invests in a diversified portfolio of securities such as stocks and fixed-income securities. People who buy units of a fund are its owners/ unit holders who club their money together in a pool - the fund. |
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| Who is a fund manager? |
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| A fund manager is the person who is responsible for investing a fund's assets, implementing its investment strategy, and managing the day-to-day portfolio trading. |
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| What are the different categories of funds? |
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There are several fund categories - prominent ones include:
3.1 Equity Funds: Equity funds invest primarily in the stocks of various types of companies. The types of stocks in which an equity fund will invest will depend upon the fund's investment objectives, policies, and strategies.
3.2 Income Funds: Income funds aim towards providing a regular stream of income to the investor. To accomplish this goal they invest in medium to long term instruments such as government securities and a combination of short term and high yielding deposits.
3.3 Money Market Funds: The aim of this fund is to provide easy liquidity, preservation of capital and moderate income, making them ideal for corporate and individual investors as a means to park their surplus funds for short time periods. Major part of the investment in this fund is placed in short instruments like bank deposits, high yielding deposits and call market placements.
3.4 Balanced Funds: The strategy of balanced funds is to combine securities from different asset classes in varying proportions to help manage moderate risk and consistent return. These funds generally tend to invest up to 65% in equity securities and the remaining in fixed income instruments.
3.5 Islamic Funds: Islamic Funds invest in Shariah Compliant securities and are advised and monitored by a Shariah Advisory Council . |
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| Why should I invest in a Fund? |
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| Funds make saving and investing simple, accessible, and affordable. The benefits of mutual funds include professional management, diversification, liquidity, low cost, convenience, and protection of investors. By investing in a mutual fund, each investor has a stake in the assets and earnings of the fund in proportion to the amount he or she has invested. |
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| What is Professional Management? |
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| With mutual funds, experienced professionals manage your portfolio of securities for you and decide which securities to buy/ sell based on extensive research and knowledge. They also monitor your investments round the clock and are committed towards providing you with complete peace of mind. |
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| What is Diversification? |
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| Mutual funds introduce diversification to your investment portfolio automatically by holding a variety of securities to reduce adverse impacts on your investments. They provide you with the opportunity to invest in many markets and sectors, usually at a fraction of the cost. |
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| What is Liquidity? |
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| Liquidity is the ability to readily access your money in an investment. Open ended mutual funds provide a unique opportunity to its investors in liquidating their investment at fair value through the Net Asset Value (NAV) methodology. |
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| What is Low Cost? |
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| To individually buy all the shares in a typical fund would be very expensive since dealing in small lots in individual shares may not be not economical. Equally, just to buy shares in a handful of companies would expose an investor to another level of risk entirely. Investing in a fund provides you with both of these differential advantages. |
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| What is Net Asset Value (NAV)? |
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NAV is the current fair value of all the fund's assets, minus liabilities, divided by the total number of outstanding units.
Offer Price: NAV plus subscription fees
Redemption Price: NAV and other charges (if applicable) |
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| What is an open-end fund? |
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| A fund that constantly redeems/ buys back units and has no limit to the number of units it can issue and has no limit on the amount to be invested. For an open ended fund, units are surrendered to the fund manager for redemption purposes. |
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| What is "subscription fees"? |
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| A charge that an investor may pay when he enters or exits an open-end fund. The subscription fees is applicable at the time of purchase of units. |
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| What is an "offer document terms & conditions"? |
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| It is a legal document that contains detailed information about the fund's objectives, services, investment guidelines and other fees. It is usually distributed at the time of public offer to solicit investments. |
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| Will I receive confirmation of my investment? |
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| You will receive an account statement showing details of the transaction within a short period of time of your application. Further, account statements are issued at the time of account movement, i.e. at further purchase, redemption and dividend distribution. |