How Mutual Fund Works In India? | Lic Mf
                     LIC MF
HOW MUTUAL FUND WORKS IN INDIA?
Mutual funds work by pooling money from a large number of investors to create a 
diversified portfolio of securities such as stocks, bonds, or other assets. The fund 
manager, who is a professional investment expert, uses the funds to purchase a 
variety of investments in accordance with the fund's investment objective.
• Each mutual fund has a specific investment objective, such as growth, income, 
or a balanced mix of both. The fund manager buys and sells securities based on 
market conditions and the fund's investment strategy.
• Investors purchase shares in the mutual fund, and the value of their investment 
is based on the net asset value (NAV) of the fund, which is calculated by dividing 
the total value of all securities in the fund by the number of outstanding shares.
• Mutual funds offer a convenient and cost-effective way for individual investors to 
access a professionally managed, diversified portfolio of securities. Regular 
reports are provided to investors, providing transparency and allowing them to 
track the performance of their investment.
7 BENEFITS OF INVESTING IN MUTUAL FUNDS
Professional Management: Expert fund managers manage the portfolio and make 
investment decisions, providing a higher level of expertise than individual investors.
Diversification: A well-diversified mutual fund portfolio reduces risk and provides 
exposure to a range of assets.
Convenience: Easy to invest, with low minimum investment amounts, and flexible 
investment options.
Liquidity: Easily convertible to cash, making it a suitable investment for short-term 
financial goals.
Affordability: Low entry and exit barriers, making it accessible to investors with limited 
resources.
Transparency: Regular updates on fund performance, holdings, and other details provide 
complete transparency to investors.
Cost-effectiveness: Lower transaction costs compared to direct investments in 
individual securities, and economies of scale through pooling of resources.
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