• Sensex77550.25918.6(1.19%)
  • Nifty24050.6275.5(1.15%)
  • USDINR92.710.15(0.16%)
Online tarding Partner With Us
BSE Prices delayed by 5 minutes ! Prices as on   Apr 10, 2026   ABB India 6865.95 [ 3.82% ]ACC 1424.5 [ 2.30% ]Ambuja Cements 445.05 [ 2.52% ]Asian Paints 2359.4 [ 3.97% ]Axis Bank 1351.45 [ 2.49% ]Bajaj Auto 9813.65 [ 3.14% ]Bank of Baroda 276 [ 0.73% ]Bharti Airtel 1870 [ 0.60% ]Bharat Heavy 284.65 [ 2.72% ]Bharat Petroleum 299.35 [ 0.66% ]Britannia Industries 5558.95 [ 1.55% ]Cipla 1229.6 [ 0.44% ]Coal India 434.25 [ -4.39% ]Colgate Palm 1939.5 [ 1.65% ]Dabur India 436.4 [ 1.63% ]DLF 569.6 [ 1.27% ]Dr. Reddy's Lab. 1232 [ 1.62% ]GAIL (India) 154.05 [ 1.25% ]Grasim Industries 2745.8 [ 0.20% ]HCL Technologies 1450.9 [ -0.98% ]HDFC Bank 810.4 [ 1.65% ]Hero MotoCorp 5468.45 [ 3.46% ]Hindustan Unilever 2155.6 [ 1.03% ]Hindalco Industries 992.25 [ 0.67% ]ICICI Bank 1322 [ 3.22% ]Indian Hotels Co. 641.3 [ 1.98% ]IndusInd Bank 830.6 [ 1.93% ]Infosys 1292.35 [ -2.94% ]ITC 304.2 [ 0.40% ]Jindal Steel 1217.55 [ 1.49% ]Kotak Mahindra Bank 374.75 [ 0.75% ]L&T 3959.9 [ 1.61% ]Lupin 2332.7 [ 1.59% ]Mahi. & Mahi 3261.8 [ 2.98% ]Maruti Suzuki India 13710.95 [ 0.89% ]MTNL 29.44 [ 5.26% ]Nestle India 1249 [ 1.62% ]NIIT 65.23 [ 1.91% ]NMDC 85.08 [ 0.79% ]NTPC 380.3 [ 0.49% ]ONGC 286.55 [ -0.62% ]Punj. NationlBak 111.7 [ 1.92% ]Power Grid Corpn. 302.6 [ 1.49% ]Reliance Industries 1350.15 [ 1.56% ]SBI 1066.7 [ 2.48% ]Vedanta 745.1 [ 1.07% ]Shipping Corpn. 243.25 [ 1.82% ]Sun Pharmaceutical 1654.7 [ -3.65% ]Tata Chemicals 690.25 [ 6.29% ]Tata Consumer 1093.5 [ 1.42% ]Tata Motors Passenge 342.55 [ 2.81% ]Tata Steel 206.6 [ 0.66% ]Tata Power Co. 399.5 [ 1.25% ]Tata Consult. Serv. 2524.35 [ -2.45% ]Tech Mahindra 1440.4 [ -1.44% ]UltraTech Cement 11589.9 [ 1.29% ]United Spirits 1267.5 [ 1.39% ]Wipro 204.85 [ 0.96% ]Zee Entertainment 82.02 [ 3.47% ]
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