Mutual fund details
A mutual fund (MF) is a pooled investment vehicle which collects savings from small individual investors and institutions in exchange for partial ownership in that particular MF which is called a Unit (or certificate of ownership in an MF). The accumulated fund raised under an MF is then managed by an asset management company that uses its investment management expertise to invest the fund in a diversified portfolio of IPOs, stocks, bonds and other kinds of permissible securities. By doing so, the MF generates investment return over time which is then distributed to all the investors (or unitholders) of the fund in the form of dividends and capital gains/losses. An investor in a mutual fund may sell his/her units in the stock market at quoted price or surrender them at net asset value to liquidate the investments.
