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Functioning of Mutual Funds

Functioning of Mutual Funds

Mutual funds are the type of investments that pool the money of several investors and buy securities to achieve specific returns. You can invest in them just like stocks, making mutual fund investing an attractive choice for beginners and experienced traders alike! There are many different types out there – some will give you higher risk/reward profiles than others. Still, they’re all generally safe enough if handled correctly by professionals who know what they’re doing at every stage.

Jaipuria School of Business organized a guest talk on “Introduction to Mutual Funds” on 23rd December 2021, which Mr. Chandresh Gupta, a trainer of NISM and SEBI, headed.

Mr. Gupta started the session with the introduction to mutual funds. He further explained the functioning and benefits of mutual funds as these funds are a great way to earn money. They are perfect for those who want to save up little by little because they involve less risk than other investment vehicles.

He further elaborated, “The classification of mutual funds.” He described Mutual funds into three categories.

  • Based on structure
  • Open-ended funds
  • Closed-ended funds
  • Interval funds
  • Based on the Investment objective
  • Debt funds
  • Equity Funds
  • Hybrid funds
  • Based on Investment lifestyle
  • Passive funds
  • Active funds

Mr. Chandresh Gupta shared his insights on a few excellent sectors that will provide returns without putting investors at undue risk. He also talked about different funds available, so we’re not just gambling our money away!

Mr. Gupta explained a wide range of risks involved with mutual funds, and he broke them down into six levels.

  1. Low Risk
  2. Low to moderate risk
  3. Moderate risk
  4. Moderately high risk
  5. High risk
  6. Very high risk

He also explained the importance of Risk-o-meter, which helps align the risk that a fund carries with the risks profile for investors. Equity is volatile and high, whereas Debt has low chances due to its conservative nature in comparison–this is an asset class for investing or managing money if one were looking at both sources combined.

Jaipuria School of Business highlights the advanced Learning of students through experience and caters to this idea through workshops and seminars. Many students with a vast attendance attended the session, where they learned necessary skills useful in the functioning of the mutual world.