Axis Money IQ Knowledge Nugget - 152
Axis Mutual Fund
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What are Overnight Mutual Funds?
Mutual funds can be one of the investment vehicles to add to your investment portfolio. Mutual funds carry a dynamic portfolio of various assets, thus offering diversification. They have become quite popular in India in the recent past. Individuals who possess less knowledge about equity but seek capital appreciation through equity investments are considering investing in such mutual funds.
SEBI, the regulatory body of mutual funds in India, define them as, “a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in the offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with the quantum of money invested by them. Investors of mutual funds are known as unitholders.
The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time.”
Mutual funds are further categorized based on several unique attributes like asset allocation, risk profile, investment portfolio, etc. so that investors are able to make a more precise and informed investment decision. Some of the major mutual fund categories include equity, debt, ETF, solution oriented, hybrid and index funds.
Today we are going to discuss overnight funds which come under debt funds.
What are debt funds?
While equity mutual funds predominantly invest in equity and equity related instruments, debt mutual funds invest in debt instruments. These funds invest in fixed income securities like treasury bills, call money, debentures, government securities, and corporate bonds, certificates of deposits, etc. A lot of individuals consider debt funds to meet short term goals like making the down payment of their new car, renovating their home, planning a vacation, or building an emergency fund etc. If you wish, you can remain invested in debt funds until your investment objective is met.
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What are overnight mutual funds?
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Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.