features of mutual funds
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What are Mutual Funds:
A mutual fund is a professionally managed fund which pools money from various investors to buy bonds, stocks and other securities.
The funds collected are referred to as Assets Under Management or AUM.
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What are Mutual Funds:
The said funds are invested by fund managers appointed by a mutual funds company or Asset Management Company.
An investor holds a portion of the portfolio in the form of units.
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Features of Mutual Funds:
One of the main advantages of mutual funds is that it is handled by professionals given that small investors do not have the required expertise and time to analyze market movements and trends.
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Features of Mutual Funds:
Mutual funds allow investors to invest their savings across a wide spectrum of securities and thereby, diversify their assets as per their risk tolerance.
Given that mutual funds are usually large, they attract lower commissions (brokerage) compared to smaller transactions of individual investors.
Mutual funds offer high liquidity. Some mutual funds are tax efficient as well in that those who remain invested in domestic equity funds for above one year do not have to shell out capital gains tax.
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