To many people, Mutual Funds can seem complicated or intimidating. We are getting to attempt to simplify it for you at its very basic level. Essentially, the cash pooled in by an outsized number of individuals (or investors) is what makes up a open-end fund . This fund is managed by knowledgeable fund manager.
It is a trust that collects money from variety of investors who share a standard investment objective. Then, it invests the cash in equities, bonds, market instruments and/or other securities. Each investor owns units, which represent some of the holdings of the fund. The income/gains generated from this collective investment is distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV. Simply put, a open-end fund is one among the foremost viable investment options for the commoner because it offers a chance to take a position in a diversified, professionally managed basket of securities at a relatively low cost.