Index Fund Corner
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| name of the scheme | 1-year returns | invest now | fund category | expense ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | invest now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | invest now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | invest now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | , | invest now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | invest now | Equity: Mid Cap | 0.28% |
By investing in mutual funds, individual investors can gain access to professionally managed portfolios, benefit from economies of scale and spread risk across multiple investments.
Mutual funds are classified based on the type of securities they invest in, their investment objectives and the returns they expect.
Investors can choose from a variety of mutual funds depending on their financial objectives and risk tolerance. However, it is important to note that mutual funds charge annual fees, expense ratios or commissions, which can reduce their overall returns.
How do mutual funds work?
A mutual fund pools money from different investors and invests it in a range of assets. Here’s a step-by-step guide on how mutual funds work:
Collecting Money: Investors buy shares or units of mutual funds, which contribute to a collective pool of money managed by professional fund managers.
Investment Strategy:
The fund manager invests the money collected in various assets, such as stocks or bonds, according to the fund’s investment objectives and strategy.
Net Asset Value (NAV) Calculation: The value of a share or unit of a mutual fund is called NAV, which changes daily depending on the investment performance of the fund. NAV is determined by dividing the total value of the fund’s assets minus any liabilities by the number of shares or units outstanding.
price change: NAV fluctuates as the prices of the fund’s investments change. If the investment performs well, the NAV increases and vice versa.
Diversification: They are invested in a diversified portfolio of securities which helps spread the risk across different assets and reduces the impact of poor performance in a single investment.
Liquidity: These funds provide liquidity as investors can buy or sell their shares at the closing NAV on any trading day.
Returns to Investors: Investors earn returns through capital gains and income distributions, which can be reinvested or paid out.
Buying and Selling: Investors can buy or sell mutual fund shares at the NAV price after each trading day. This means that when you sell your shares, the price you receive is determined by the NAV at the end of the market that day.
charge: Mutual funds charge management fees, administrative costs and sometimes exit loads, which can affect overall returns.
Tax Implications: Mutual fund returns are subject to capital gains tax and investors must pay tax on distributed capital gains.
(TagstoTranslate)Mutual Funds(T)Business(T)Markets(T)Stocks(T)Investing(T)Mutual Fund Investing(T)How Mutual Funds Work(T)How to Invest in Mutual Funds
