What does MF stand for?
MF STANDS FOR – Mutual Fund
Mutual Funds are financial intermediary that pool money from individual or corporate investors and invest in diversified – portfolios of assets like stocks, short term money market, bonds, government security, equity share etc. and distribute the profit to its inventors. If I tell you about full form of MF in general way. I would like to tell you that MF stands for Mutual Fund that is group of funds.
Advantage of Mutual Fund:
- Expert Management : Mutual Fund are managed by qualified and experienced professionals who have access to company records, analysts critical and timely market information to make a sound investment decision. They are best qualified professionals to identify and maximize investment opportunities.
- Diversification of portfolio: Diversification is an investment strategy that can be neatly summed up as “Don not put all your eggs in one basket”. It means that spreading your investment across a wide range of companies and industry can help you to lower your risk if a company or sector fails.
- Affordability: Since the minimum amount to be invested in a mutual fund is low. Anyone can easily get access to a diversified portfolio even with a very small amount of money.
- Low Cost: Mutual Funds benefit economics of scale in brokerage, custodial and other fees translating into lower costs for investors.
- Higher Protection: Mutual Fund Sector is regulated by SEBI to safeguard investor’s interests.
- Transparency: Since the fund – portfolios are disclosed to investors on a regular basis, so we can say that there is more transparency in mutual fund than other financial –product.
- Tax Benefit: you can get tax benefit if you invest in mutual fund under section 80c of the Income Tax Act. Also, dividend income Tax Free in the hands of investors.
Disadvantage of Mutual Fund:
- Lack of control: investors typically cannot ascertain the exact mix of funds’ portfolios at any given time. In fact, he is directly influenced by the fund manager who sell or buy securities according to his knowledge and decision making power.
- Cost and charges: Investors have to pay sale charges, annual fees and others expense like purchase fees, redemption fees, exchange fees etc. Regardless of how the fund performs. Apart from that depending on the timing of their investment, investors may have to pay taxes on any capital gains distribution they have received.
- Price Uncertainty: With an individual stock, you can obtain real time pricing information with relative ease by checking financial websites or by calling your broker. But in mutual fund, the price at which you purchase or redeem shares or mutual fund depend on the fund’s NAV which is calculated once a day.
Type of Mutual fund:
Generally, mutual fund have four types that can be explain in detain by following charts:
Other MF Full Form :