Providing You Some Extra Income
Mutual fund is an investment program in which a board of members collects money from various investors and buys shares and stocks on behalf of these investors. This board of members ensures that the investors get maximum profit from their investment. Therefore the working of mutual funds can be simply explained as follows. The money from the investors is collected by the fund managers are invested in securities and generate enough returns and passed back to the investors. There are many companies that offer mutual fund trade at different rates. It is the last 20 years that it received this much significance. Now many people are moving their money into this for a better profit, because it offers a profit greater than investments in banks.
There are several advantages in mutual funds that receive your attention. The money spends for mutual funds will be invested in different categories. So if one industry is weak it may not affect your entire investment. Also, there will be professionals to manage your money. So they can do this investment for you in a better way by utilizing their knowledge in investments to maximize the profits. Mutual funds usually provide better service and they are more convenient to handle. You can judge the growth of your investment periodically.
Mutual fund schemes are categorized based on their structure and by investment objectives. There are open ended schemes with no fixed maturity which gives liquidity to your money. Or close ended schemes with fixed maturity terms and interval based investments. These all belong to the structure based mutual funds. Based on investment objectives there are growth schemes which encourage long term depositions. There is an income scheme which is based upon your salary. It is suitable for retired employees and those with fixed income. So you can see mutual funds offers a wide variety of investment schemes for all categories of people. Depending on the money you have you can choose a plan that gives you supplementary income.