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Sunday, 10 July 2016

Mutual Funds - Money Multiplier Investment Instrument

What is Mutual Fund?

A mutual fund is an investment instrument that clubs the money of many investors who share a common or mutual financial goal and invests them in a diversified instrument of investment.

Basis of mutual fund

In Mutual fund, different number of investor pool their money with AMC (Asset Management Company). Each AMC has dedicated fund manager for their mutual funds. These Fund Manager invest pooled money in stock market, Debt Market and Money market, and generates Income/ Dividend/ Total return. This generated interest passed back to investors according to their investment.

As said, "Mutual fund is the best way for accumulate surplus amount and wealth creation."

Who regulates Mutual Fund?

SEBI (Securities and Exchange Board of India) is the regulatory body of Mutual Fund.
SEBI established on 12 April 1992 through the SEBI Act, 1992. In April 1998 the SEBI was authorized as the regulator of the capital market in India under a resolution of the Government of India.
Official address of SEBI: SEBI Bhavan, Bandra Kurla Complex, Bandra East, Mumbai-400051

History of Mutual Funds

Mutual funds as an investment instrument started in 1963. Unit Trust of India is the first company who started MF in India. Later on, the different company came into the market and then Regulator of MF into existence.

Important Phase of Mutual Fund
1963-1987: Unit Trust of India
1987-1993: Entry of Public Sector banks, LIC & GIC
1993-1996: Entry of private sector funds
1996-1999: Implementation of SEBI regulation
2004 onwards: Improvisation and growth

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