Mutual funds (COMMERCE)
MUTUAL FUNDS INTRODUCTION Mr John father of four children entered a fruit shop. He wanted to make his family happy. As everyone in the family is of different age and taste, John decides to customize a basket rather than buying only one fruit. So, for his wife, he took some strawberries as she is expected to bake a cake by evening. For his Elder child, he puts in Banana as he is into building muscles and gain mass. For his second child, he takes apples as he was not doing well. For his daughter, he took mango as she has a sweet tooth. And lastly, he took Watermelon for his fourth child. John made sure to get a maximum return by diversifying his money in a customized basket. Similarly, a Mutual fund can be seen as an investment car where many investors pool their savings/money to earn return the capital over a period. The pool of funds is managed by a professional called fund manager who is responsible to invest it in different securities and assets. The gains (or losses) from the