A mutual fund is a part of AMC company that pools money from many investors and invests the money in securities such as stocks, bonds, debt, commodities, real-estate, etc. Combined holdings of the mutual fund is called as its portfolio. Investors buy units in mutual funds. These units are denoted by NAV(Net Asset Value).
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TYPES OF MUTUAL FUNDS:-
➡️1) CLOSE-ENDED MUTUAL FUNDS
✍A closed-end mutual fund is a portfolio of assets that raises a fixed amount of capital through an initial public offering (IPO) or new fund offer(NFO) and then lists shares for trade on a stock exchange. A closed-end fund has a professional manager overseeing the portfolio and actively buying and selling holding assets.It has a fixed amount of units that are sold and purchased on the stock exchange. Its maturity period is fixed by Asset management company(AMC).
Example
1) Sbi tax advantage fund - regular plan
2) ICICI Prudential growth fund
3) ICICI Prudential R.I.G.H.T. Fund
4)Reliance FHF XXV
5) HDFC FMP 793D
ETC
➡️2) OPEN-ENDED MUTUAL FUNDS
✍Open-end mutual fund is a scheme that can issue and redeem shares at any time. An investor can purchase/sell units in the fund directly from the AMC itself. It typically do not limit the number of units they can offer, and are buy and sell on demand. When an investor purchases units in an open-end fund, the fund issues those units and when someone sells units, they are bought back by the fund.
EXAMPLE
1)SBI Small Cap Fund
2)Mirae Asset Emerging Bluechip Fund
3)Aditya Birla Sun Life Banking & Financial Services Fund
4)ICICI Prudential Banking and Financial Services Fund
ETC
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OPEN-ENDED vs CLOSE-ENDED
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