Axis Money IQ Knowledge Nugget - 166
Axis Mutual Fund
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Exchange Traded Funds: How to select a suitable ETF fund
If you are new to the world of investing, you might have heard someone talking about mutual funds as a decent investment option. For those who do not know, mutual funds are a pool of professionally managed funds that collect money from investors sharing a common investment objective and invest the funds in securities across the Indian economy and asset classes. It is the duty of the fund manager to buy/sell securities in accordance with the scheme’s investment objective.?
The problem with a lot of young investors is that they have the tendency of having high expenses and save very little of their monthly income. But if you want to become financially stable in future, you might want to start investing now so that you don’t have to worry later.
But if you are considering mutual funds as an investment option bear in mind that mutual fund investments are exposed to market volatility and fund houses aren’t obligated to offer investors with guaranteed returns. So it is better that before making any investment, you first succeed in understanding the primary reason behind your investment. Having a defined financial goal is necessary for efficient financial planning. If you want to save a decent capital for future, you need to start saving now.
In the recent past, exchange traded funds have picked up the interest of both new age as well as seasoned investors. A lot of individuals are considering ETFs for long term investments and also to give their investment portfolio some diversification. If you wish to find out more about exchange traded funds, read further.
What are Exchange Traded Funds?
According to SEBI (Securities and Exchange Board of India), the regulator of mutual funds in India, an Exchange Traded Fund is – “an open ended scheme which replicates/tracks the particular index. Of the total assets, this fund must invest a minimum of 95 per cent in securities of a particular index (which is being replicated or tracked)”.
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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.