Posts tagged ‘Mutual Funds’

April 9, 2016

History of Mutual Funds in the World

Mutual funds go back to the times of the Egyptians and Phoenicians when they sold shares in caravans and vessels to spread the risk of these ventures. The foreign and colonial government Trust of London of 1868 is considered to be the fore-runner of the modern concept of mutual funds. The USA is, however, considered to be the Mecca of modern mutual funds.

The establishment of investment companies which provided an opportunity to small investors to invest in the equity markets attracted the investment opportunity in the stock market. The first investment company was The Scottish-American Investment Company, set-up in London in 1860. Initially, these investment trusts became very popular and their number increased to over 50. But most of them were wiped-out in the 1890 stock market crisis.

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October 30, 2011

Types of Mutual Funds: By Style of Investment

The investment styles of funds or fund managers may be of two types – Growth or Value

Value Funds

These funds buy stock in fundamentally sound companies whose shares are currently under-priced in the market and have been underperforming their potential, and thus are out of favor with investors. Value funds seek out such stocks because, owing to their depressed prices, they offer strong value. Value funds will add only those shares to their portfolios that are selling at low price-earnings ratios, low market to book value ratios and are thus believed to be undervalued compared to their true potential.

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September 29, 2011

What is Rupee Cost Averaging

There are many investors who prefer to invest in lumpsum into an asset class and forget about it. And there so many investors who are not able to invest in an asset class at one go. So they do it by investing a fixed sum regularly.

When one invests in any asset in one go s/he buy the asset at prevailing price at that time. S/he is not get affected by price of asset at the buy price as her/his buying price is fixed. But one who invests a fixed sum regularly s/he buys assets at different prices.

In financial market there is always volatility. So price of assets changes. Some times the price increases and some times the prices falls. And an investor who keeps investing regularly is forced to buy the assets on the prevailing prices.

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September 29, 2011

Investment Options with Regards to Mutual Funds

There are a variety of options available to the investors when investing in mutual funds. The investors have options in these investment plans to choose from according to the needs and financial capabilities as well as the financial goals. The investment plans offered by mutual fund houses are aimed to satisfy various needs and financial goals of the investors. The important options for investment plans that mutual funds offer are as below:

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September 28, 2011

Different Avenues of Investments

In the modern financial system there are so many investment avenues to choose from today in financial market and it has become difficult for anyone to decide about these avenues. Some of these investment avenues offer attractive returns but with high risks and some offer lower returns with very low risks. An overall analysis of these investment avenues with risk and return trade is presented in this article. These investment avenues are:

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September 26, 2011

Introduction to Systematic Investment Plan

Systematic Investment Plan (SIP) is a simple, time-honored strategy designed to help investors accumulate wealth in a disciplined manner over the long period of time and plan a better future for them. This disciplined approach of investing provides with the following benefits:

  1. Power of Compounding
  2. Rupee Cost Averaging
  3. Convenience
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September 24, 2011

Risk and Return Tradeoff in Context of Mutual Funds

Like all the other investment avenues, mutual funds too have investment risk. It is very important to maintain risk and return tradeoff when investing into mutual funds and calculating the returns. It is true that the risks on investments into the mutual funds are lower than the investment into the stocks directly. Because of this reason many investors tend to ignore the risk component while calculating the effective returns from the mutual funds.

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September 24, 2011

Pros and Cons of Mutual Fund Investments

Every investment decision has some pros and cons. And in any case it is not possible to avoid all the cons and have all the pros alone. Both the pros and cons travel together. So it becomes important to balance those pros and cons so that you are able to benefit most out the opportunities available to you.

When you are planning to invest a small sum of money, it is always difficult to decide to which financial instrument to invest as different instruments offer benefits and very few are good enough to get the maximum out of the money.

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September 24, 2011

Mutual Funds: Organizational Aspects

Mutual Funds are one the most popular investment avenues in India. And in current financial turmoil mutual funds have become preferred investment avenues. So there are huge discussions about funds in India. In the current article the organizational aspects of mutual funds are presented.

What is a Mutual Fund?

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.

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September 23, 2011

Introduction to Mutual Funds

 

Mutual fund is convenient, easy and simple investment instrument with lower risk in comparison to the stock market with high expected returns. 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 stocks, debentures and other securities. The income earned through these investments and the capital appreciations realized 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.

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