A Study on Mutual Funds Investments and its Long Term Impact

Abstract

Investment and saving in a portfolio can take different forms. An investor can either invest directly in shares and Securities, or can invest through an investment or portfolio management company, also referred to as a mutual fund. An investment company is a financial intermediary that collects money from investors and invests in various securities or their behalf.

As a saving and investment instrument mutual fund can be defined as a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested by the fund manager on behalf of the investors in different types of securities. The income earned through these investments and the capital appreciated realized by the scheme are shared by its unit holders in proportion to the number of units owned by them.

The basic objective sought to be achieved by Mutual Fund is to provide an opportunity for lower income groups to acquire without much difficulty financial assets. They cater mainly to the needs of the individual investor whose means are small and to manage investors portfolio in a manner that provides a regular income, growth, safety, liquidity and diversification opportunities