Mutual Funds For Beginners India

Mutual Funds For Beginners India:

Basically mutual fund is a pool of fund where money is pooled in from many individual investors is what know as mutual fund. Then that pool of fund will be invested in different different investments. It invest the money in equities, bonds, money market instruments  and other securities.

Mutual fund will earn income of that investment , income earned can be in form of interest, dividend or gain. That earned income will be distributed to the investors.

Management expenses:

Mutual funds are govern and managed by a Professional Fund Mangers these mutual fund management companies will charge expense ratio. Expense will be in-between 0.5%  to 2.5 % approximately.

Expense ratio indicates how much the fund charges in terms of percentage annually to manage your investment portfolio. Suppose you have invested 20,000 and your fund expense ratio is 2% then you need to pay 400 to the fund to manage your investments. if you get return of 15% on your investment amount i.e. 20,000 then it will be 23,000. And suppose you have paid 2% charges then your actual return is 22,600.