Mutual Fund Management

To many people, Mutual Funds can seem complicated or intimidating. We are going to try and simplify it for you at its very basic level.

Essentially, the money pooled in by a large number of people (or investors) is what makes up a Mutual Fund. This fund is managed by a professional fund manager.

It is a ‘trust’ that collects money from a number of investors who share a common investment objective. Then it invests the money in equities, bonds, money market instruments and/or other securities. Each investor owns units, which represents a portion of the holdings of the fund. The income/gains generated from this collective investment are distributed proportionately amongst the investors after deducting certain expenses, by calculating a schemes’ ‘Net Asset Value or NAV’. Simply put, a Mutual Fund is one of the most viable investment options for the common man as it offers an opportunity to invest in diversified, professionally managed basket of securities at a relatively low cost.