What is a Mutual Fund ?

I don’t mine repeating myself several times, unless you are helping someone to explain things. This is the post for my junior blogcolleagues and for my team trying to dig for basics of Mutual fund , Asset management  company , selection of funds and comparison of scheme with others.

So friends, A mutual fund is a trust that pools the money of several investors and manages investments on their behalf. Legally it is like any other company you know of. Hence, the fund is also called a mutual fund company. The fund company takes your money and like you from other new investors. This is added to the money that’s already invested with the fund.
Asset management company (AMC) – Investing and managing the collected money is a difficult task. The fund company delegates this to a company of professional investors, usually experts who are known for smart stock picks. This company is the Asset Management Company (AMC) and the fund company usually delegates the job of investment management for a fee. Continue reading “What is a Mutual Fund ?”

MUTUAL FUNDS – Please read the disclosure carefully

This is a nice summary of the flaws in many mutual funds published on Market Watch. Too many mutual funds are simply index fundsimages disguised as something else. And most of the rest are simply attempts to market a product that isn’t designed to actually add value (but sounds fancy enough to accumulate assets). If you missed John Bogle’s discussion on the flaws in the mutual fund industry you should watch it here.

The 10 things via Market Watch:

  1. “Cheap funds often outperform pricey ones.”
  2. “We can’t beat the market.”

  3. “When skill fails, we just double (or quintuple) our odds.”

  4. “People aren’t buying our product…” Continue reading “MUTUAL FUNDS – Please read the disclosure carefully”