Mutual Funds Write For Us
A mutual fund is a pool of money be able to by a professional fund manager. It is an investment fund that pools money from several investors with a typical investment goal and invests in stocks, bonds, money market instruments, and other securities. After deducting applicable costs and fees, the income/profits generated through this collective investment will be distributed proportionately among the investors by calculating the “Net Asset Value” (NAV) of the scheme. Simply put, the money collected from many investors creates an investment fund.
Here is an Easy Way to Understand the Concept of a Mutual Fund Share
Suppose you have a box of 12 chocolates that cost £40. Four friends buy the same thing but only have £10 each, and the seller only sells in boxes. The friends then decide to raise £10 each and buy a pack of 12 chocolates. Each will receive 3 chocolates or three stocks, comparable to mutual funds, depending on their contribution.
And how do you calculate the cost of a unit? Divide the total by the number of chocolates: 40/12 = 3.33.
So, if you multiply the number of units (3) by the cost per unit (3.33), you get an initial investment of £10.
Consequently, each friend owns a unit of the chocolate box that belongs to everyone, and each person owns the box in common.
Which Type of Mutual Fund is the Best?
Action funds are the best mutual funds to invest in for the long term. Choose a growth fund to quickly achieve your long-term goals as the Fund’s returns increase over time.
Is Mutual Fund Profitable?
Mutual funds are a type of investment where the investors pool their money and invest in stocks, bonds, and other securities. They can be profitable if you choose the right Fund and remain invested in it long-term.
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