CHARGES IN MUTUAL FUNDS

CHARGES IN MUTUAL FUNDS

FUND MANAGER MANAGES YOUR MONEY.
SUPPORTED BY A TEAM OF FINANCIAL ANALYSTS AND MARKET EXPERTS.
OBVIOUSLY, THEY DON’T DO THIS FOR FREE.
THE MUTUAL FUND COMPANY CHARGES FOR THEIR SERVICES.

 

1 EXPENSES RATIO

MUTUAL FUNDS MANAGE YOUR MONEY AND IN RETURN, THEY CHARGE FEES CALLED AN EXPENSES RATIO.
EXPENSE RATIO IS CHARGED ON ANNUAL BASIS.

 

2 STAMP DUTY

THE STAMP DUTY IS CHARGED AT THE RATIO OF 0.005% ON THE INVESTMENT VALUE.
STAMP DUTY CAME INTO ACTION RECENTLY, FROM 1STJULY, 2020.

 

3 SERVICE FEES

THERE ARE MANY ONLINE PLATFORMS TO INVEST IN MUTUAL FUNDS.
THERE COULD BE A TRANSACTION FEE OR SERVICE FEE THAT MAY OR MAY NOT BE APPLICABLE BY THE PLATFORM THAT YOU MAY BE USING.

 

4 EXIT LOAD

WHEN AN INVESTOR EXITS FROM A MUTUAL FUND SCHEME WITHIN A SHORT SPAN, AN EXIT LOAD HAS TO BE PAID.
THIS FEE IS CHARGED IN ORDER TO DISCOURAGE INVESTORS FROM OPTING OUT IF THE SCHEME TOO EARLY.

 

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WHO MANAGES MUTUAL FUNDS

WHO MANAGES MUTUAL FUNDS

THE MONEY IS MANAGED BY ASSET MANAGEMENT COMPANY.
THERE ARE MANY ASSET MANAGEMENT COMPANIES LIKE ICICI PRUDENTIAL, SBI MUTUAL FUNDS, HDFC AMC, MOTILAL OSWAL AND MANY OTHERS.

 

EVERY ASSET MANAGEMENT COMPANY HAS MANY MUTUAL FUND SCHEMES FOR DIFFERENT KIND OF PEOPLE DEPENDING ON THEIR GOAL, THEIR RISK FACTOR ETC.
EX – SBI MUTUAL FUND HAS 100+ MUTUAL FUND SCHEMES.
THERE ARE THOUSANDS OF PEOPLE WHO INVEST IN THE SAME MUTUAL FUND.

 

NOW, WHO WILL TAKE DECISIONS ON WHICH STOCKS TO BUY, HOW MUCH TO BUY, WHEN TO BUY, WHEN TO SELL ETC?
TO EVERY MUTUAL FUND, THERE IS A FUND MANAGER, WHO WILL TAKE DECISIONS LIKE WHICH STOCK TO BUY, HOW MUCH TO BUY, WHEN TO  BUY, WHEN TO SELL !
THE FUND MANAGER IS EXPERTIN THIS FIELD.
THAT IS WHY MUTUAL FUNDS ARE PROFESSIONALLY MANAGED FUNDS IN WHICH YOU AS AN INVESTOR DOES NOT HAVE TO DO ANY RESEARCH WORK.

 

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WHAT ARE MUTUAL FUNDS

WHAT ARE MUTUAL FUNDS
MUTUAL FUND CAN SEEM TRICKY
BUT THEY ARE VERY SIMPLE

SUPPOSE A GIRL GOT RS 10 FROM HIS FATHER.
BUT SHE WANTED TO BUY A RS 100CHOCOLATE BOX.
SO SHE CONVINCED HER OTHER FRIENDS TO COLLECTIVELY BUY THE CHOCOLATE BOX.
THE KIDS COLLECTIVELY CONTRIBUTED RS 100 (SOME MORE , SOME LESS TO BUY THE CHOCOLATE BOX.
THE KIDS THEN DISTRIBUTED CHOCOLATES PROPORTIONATELYAMONGST THEM ACCORDINGLY TO THE CONTRIBUTION.
 


MUTUAL = FROM MANY PEOPLE
FUND = POOL OF MONEY
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.
THEN, IT INVESTS THE MONEY IN STOCKS, BONDS, AND OTHER MARKET INSTRUMENTS.
THE INCOME/GAINS GENERATED FROM THIS COLLECTIVE INSTRUMENT IS DISTRIBUTED PROPORTIONATELY AMONGST THE INVESTORS.

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THE 5 TYPES OF ASSET CLASSES

THE 5 TYPES OF ASSET CLASSES

EQUITY
STOCK, INDEX FUND, ETF’S, MUTUAL FUND

BONDS

LENDING TO THE GOVERNMENT OR A COMPANY
 CASH
BANK ACCOUNT OR PAPER MONEY
 REAL ESTATE
 HOMES, APARTMENT, REIT’S, LAND
COMMODITIES
GOLD,SILVER, CRUDE OIL,CORN,CATTLE