The Advantages of Investing in a TATA Mutual Fund
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities.
The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Advantages of Mutual Fund
The advantages of investing in a Mutual Fund are:
- Professional Management
- Convenient Administration
- Return Potential
- Low Costs
- Choice of schemes
- Tax benefits
- Well regulated
Frequently used terms
Net Asset Value(NAV)
Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.
Is the price you pay when you invest in a scheme. Also called Offer Price. It may include a sales load.
Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price.
Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related.
Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’ schemes.
Repurchase or ‘Back-end’Load
Is a charge collected by a scheme when it buys back the units from the unitholders.