Month: January 2023
WHAT IS A DIRECT PLAN?
WHAT IS A DIRECT PLAN? One may invest in mutual funds DIRECTLY i.e., without involving or routing the investment through any distributor/agent in a ‘Direct Plan’. OR one may choose to invest in mutual funds with the help of a Mutual Fund distributor/agent in what is termed as a ‘Regular Plan’. ‘Direct Plan’ and ‘Regular Plan’ are both part of the same mutual fund scheme, have the same / common portfolio and are managed by the same fund manager, but have different expense ratios (recurring expenses that is incurred by the mutual fund scheme). Direct Plan has lower expense ratio
MYTHS & FACTS ABOUT MUTUAL FUNDS
MYTHS & FACTS ABOUT MUTUAL FUNDS MYTH : MUTUAL FUNDS ARE FOR EXPERTS Fact : In fact, Mutual funds are meant for of common investors who may lack the knowledge or skill set to invest in securities market. Mutual Funds are professionally managed by expert Fund Managers after extensive market research for the benefit of investors. A mutual fund is an inexpensive way for investors to get a full-time professional fund manager to manage their money. MYTH : MUTUAL FUND INVESTMENTS ARE ONLY FOR THE LONG TERM
NET ASSET VALUE (NAV)
NET ASSET VALUE (NAV) WHAT IS NAV? NAV stands for Net Asset Value. The performance of a mutual fund scheme is denoted by its NAV per unit. NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on a given date. For example, if the market value of securities of a mutual fund scheme is ₹200 lakh and the mutual fund has issued 10 lakh units of ₹ 10 each to the investors, then the NAV per unit of the fund is ₹ 20 (i.e., ₹200 lakh/10 lakh).
SEBI CATEGORIZATION OF MUTUAL FUND SCHEMES
SEBI CATEGORIZATION OF MUTUAL FUND SCHEMES As per SEBI guidelines on Categorization and Rationalization of schemes issued in October 2017, mutual fund schemes are classified as – Equity Schemes Debt Schemes Hybrid Schemes Solution Oriented Schemes – For Retirement and Children Other Schemes – Index Funds & ETFs and Fund of Funds – Under Equity category, Large, Mid and Small cap stocks have now been defined.