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Mutual funds are the investment which helps in pooling the saving of various investor and invest the same in various financial securities.

An AMC is Asset Management Company highly controlled organization that pools money from investors and invests the same in a portfolio. They charge a little fee for fund management.

NAV is a Net Asset Value of the fund is the aggregate market value of the assets of the fund net of its liabilities. The NAV per unit is simply the net value of assets divided by the number of units outstanding. Buying and selling into funds are done based on NAV-related prices.

The calculating formula for net asset value is
Assets – Debits / Number of outstanding units = Net asset value (NAV)

There are various types of fund are Equity funds, Diversified funds, Sector funds, Index funds, Tax Saving Funds, Income Funds, Liquid Funds, Gilt Funds, Balanced Funds, Hedge Funds, etc.

The non-refundable fee paid to the AMC at the point of purchase of mutual fund units is named as Entry Load. Entry Load is joined to the NAV (buying price) when you are buying Mutual Fund units.

The non-refundable fee paid to the AMC at the time of redemption/ transfer of units among schemes of mutual funds is named as exit load. It is deducted from the NAV(sale price) at the time of such redemption/ transfer.

These schemes offer tax rebates to the investors following particular provisions of the Income Tax Act, 1961 as the Government gives tax incentives for investment in specified avenues, for example, Equity Linked Savings Schemes (ELSS) under section 80C. These schemes are growth-oriented and invest pre-dominantly inequities. Their growth chances and risks linked are like any equity-oriented scheme
Who can invest in the mutual fund?
The person who can invest in mutual funds is resident Indian adult individuals, NRIs, Companies, HUF, Trusts, Partnership firms, Cooperative and Regional Banks, etc.

A Systematic Investment Plan (SIP), is a way of investing money in mutual funds, where one spends a fixed amount of money, automatically at periodical intervals.

A Systematic Withdrawal Plan (SWP) allows you to withdraw money from your current mutual fund account at predetermined intervals. Systematic withdrawal plans are adopted by investors to build a steady stream of money inflows from their investments.

Systematic Transfer Plan is a mixture of SIP and SWP; it is a procedure where an investor transfers a set amount of money from 1 scheme to another, which is normally between a debt fund and an equity fund.

A scheme that invests essentially in other schemes of the same mutual fund or another mutual fund is known as a Funds of Funds scheme. An FoF scheme allows investors to gain higher diversification by one scheme. It spreads risks over a greater universe.

Annual Fund Operating Expenses, often known as the expense ratio, is the percentage of assets payable to the fund manager i.e. AMC.

Yes, non-resident Indians can also spend in mutual funds. Certain details and documents they have to fulfill for obtaining mutual funds services.

Mutual funds are known best for reducing the risks involved in market investments by their different and professional management. Yet, the risks led by price fluctuation, liquidity, credit risks, etc cannot be avoided. An investor can select schemes prudently depending on his risk-taking capacity, keep a track of market happenings and take proactive actions if required

Investors need to be clear that mutual funds are medium to long-term investments. Hence, short-term irregular profits will not be sustainable in the extended run. But in the medium to long run, the mutual funds tend to exceed most other avenues of investments at the same time avoiding the risk of direct investment followed by professional fund managers.

The repurchase price is the price at which a close-ended scheme repurchases its units. Repurchase can both be at NAV or can have an exit load.

The redemption price is the price gained on selling units of the open-ended scheme. If the fund does not impose an exit load, the redemption price will be the same as the NAV. The redemption price will be less than the NAV in case the fund imposes an exit load.

Fund managers are mutual fund experts who have their eyes on the market and pick on the right pick of stocks, debentures, debt instruments, government securities among others to maximize profits on your investment.