Mutual fund

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India (UTI), at the initiative of the Government of India and Reserve Bank of India (RBI).

A mutual fund is a type of bank that collects the assets of its shareholders and invests them in securities such as stocks, bonds, money market instruments and other assets. Mutual funds are managed by professional money managers who arrange the fund's assets to generate capital gains or income for the fund's investors.

A mutual fund's portfolio is created and maintained to satisfy the investment objectives stated in the registration. Mutual funds provide small and individual investors with access to professionally managed portfolios of stocks, bonds, and other securities. As a result, each shareholder receives a proportionate share of the fund's profits or losses. Mutual funds invest in a variety of assets, and their performance is commonly assessed as the change in the fund's overall market value, which is derived by aggregating the performance of the fund's underlying investments. Mutual fund shares are normally purchased or redeemed at the fund's current net asset value (NAV), which does not vary during market hours but is settled at the conclusion of each trading day.