• Sensex76847.57-702.68(-0.9%)
  • Nifty23842.65-207.95(-0.86%)
  • USDINR92.65-0.06(-0.06%)
Online tarding Partner With Us
BSE Prices delayed by 5 minutes ! Prices as on   Apr 13, 2026   ABB India 6829.75 [ -0.53% ]ACC 1409.5 [ -1.05% ]Ambuja Cements 441.05 [ -0.90% ]Asian Paints 2352.3 [ -0.30% ]Axis Bank 1353.75 [ 0.17% ]Bajaj Auto 9812.1 [ -0.02% ]Bank of Baroda 275.85 [ -0.05% ]Bharti Airtel 1870.4 [ 0.02% ]Bharat Heavy 287.85 [ 1.12% ]Bharat Petroleum 292.65 [ -2.24% ]Britannia Industries 5586.85 [ 0.50% ]Cipla 1211.3 [ -1.49% ]Coal India 435.1 [ 0.20% ]Colgate Palm 1915.65 [ -1.23% ]Dabur India 424.75 [ -2.67% ]DLF 568.4 [ -0.21% ]Dr. Reddy's Lab. 1235.2 [ 0.26% ]GAIL (India) 153.65 [ -0.26% ]Grasim Industries 2711.25 [ -1.26% ]HCL Technologies 1429.9 [ -1.45% ]HDFC Bank 794.05 [ -2.02% ]Hero MotoCorp 5246.65 [ -4.06% ]Hindustan Unilever 2127.5 [ -1.30% ]Hindalco Industries 977.95 [ -1.44% ]ICICI Bank 1350.55 [ 2.16% ]Indian Hotels Co. 635.75 [ -0.87% ]IndusInd Bank 819.6 [ -1.32% ]Infosys 1277.35 [ -1.16% ]ITC 298.65 [ -1.82% ]Jindal Steel 1217.7 [ 0.01% ]Kotak Mahindra Bank 372.15 [ -0.69% ]L&T 3953.9 [ -0.15% ]Lupin 2312.35 [ -0.87% ]Mahi. & Mahi 3220.2 [ -1.28% ]Maruti Suzuki India 13078.65 [ -4.61% ]MTNL 30.78 [ 4.55% ]Nestle India 1226.75 [ -1.78% ]NIIT 65.75 [ 0.80% ]NMDC 85.8 [ 0.85% ]NTPC 386.15 [ 1.54% ]ONGC 287.5 [ 0.33% ]Punj. NationlBak 110.75 [ -0.85% ]Power Grid Corpn. 300.3 [ -0.76% ]Reliance Industries 1314.55 [ -2.64% ]SBI 1063.2 [ -0.33% ]Vedanta 752.5 [ 0.99% ]Shipping Corpn. 246.05 [ 1.15% ]Sun Pharmaceutical 1652 [ -0.16% ]Tata Chemicals 718.85 [ 4.14% ]Tata Consumer 1090.3 [ -0.29% ]Tata Motors Passenge 345.2 [ 0.77% ]Tata Steel 206.55 [ -0.02% ]Tata Power Co. 409.45 [ 2.49% ]Tata Consult. Serv. 2472.65 [ -2.05% ]Tech Mahindra 1435.8 [ -0.32% ]UltraTech Cement 11499.9 [ -0.78% ]United Spirits 1231.5 [ -2.84% ]Wipro 203 [ -0.90% ]Zee Entertainment 79.91 [ -2.57% ]
BSE

MARKETS

Mutual Fund

MUTUAL FUND CONCEPT

1. CONCEPT 

2. ORGANISATION OF A MUTUAL FUND 

3. ADVANTAGES OF MUTUAL FUNDS 

4. TYPES OF MUTUAL FUND SCHEMES 

5. FREQUENTLY USED TERMS 

 
 
CONCEPT 

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:
Mutual Fund Operation Flow Chart
 
Top 
 
ORGANISATION OF A MUTUAL FUND 

There are many entities involved and the diagram below illustrates the organisational set up of a mutual fund:
Organisation of a Mutual Fund
 
Top 
 
ADVANTAGES OF MUTUAL FUNDS 

The advantages of investing in a Mutual Fund are:
  • Professional Management
  • Diversification
  • Convenient Administration
  • Return Potential
  • Low Costs
  • Liquidity
  • Transparency
  • Flexibility
  • Choice of schemes
  • Tax benefits
  • Well regulated
    •  
    Top 
     
    TYPES OF MUTUAL FUND SCHEMES 

    Wide variety of Mutual Fund Schemes exist to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry.
    Top 
     
    FREQUENTLY USED TERMS 
     
    Net Asset Value (NAV)

    Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.
     
    Sale Price

    Is the price you pay when you invest in a scheme. Also called Offer Price. It may include a sales load.
     
    Repurchase Price
    Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price.
     
    Redemption Price
    Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related.
     
    Sales Load
    Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’ schemes.
     
    Repurchase or ‘Back-end’Load
    Is a charge collected by a scheme when it buys back the units from the unitholders.
     
    Top