+ Investing Rules / Ideas
+ Mutual Fund Check - What to look for in a Mutual Fund?
+ Why Invest in Mutual Funds?
+ What to opt for DIVIDEND/GROWTH plans?
+ What us SIP?
+ LOW NAV, does it mean ine should invest in this fund?
+ What is Mutual Fund NFO?
+ Insurance with Mutual Fund?
+ What is NAV?
Net asset value: -The net asset value, or NAV, is a funds value of its holdings, usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. Open-end funds sell and redeem their shares at the NAV, and so only process orders after the NAV is determined. Closed-end funds may trade at a higher or lower price than their NAV; this is known as a premium or discount, respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by the different classes.
Some mutual funds own securities which are not regularly traded on any formal exchange. These may be shares in very small or bankrupt companies; they may be derivatives; or they may be private investments in unregistered financial instruments (such as stock in a non-public company). In the absence of a public market for these securities, it is the responsibility of the fund manager to form an estimate of their value when computing the NAV. How much of a funds assets may be invested in such securities is stated in the funds prospectus.
+ What is Load?
A front-end load or sales charge is a commission paid to a broker by a mutual fund when shares are purchased, taken as a percentage of funds invested. The value of the investment is reduced by the amount of the load. Some funds have a deferred sales charge or back-end load which is paid to the broker out of the proceeds when shares are redeemed. (This is distinct from a redemption fee, which is also paid out of proceeds, but is kept by the fund. Many funds charge redemption fees when shares are sold a short time after they are purchased, to discourage investors from market timing.) Load funds are sold through financial intermediaries such as brokers, financial planners, and other types of registered representatives who charge a commission for their services.
It is possible to buy many mutual funds directly from the fund sponsor, without paying a sales charge. These are called no-load funds. Some discount brokers will sell no-load funds, sometimes for a flat transaction fee or even no fee at all. (This does not necessarily mean that the broker is not compensated for the transaction; in such cases, the fund may pay brokers commissions out of distribution and marketing expenses rather than a specific sales charge.
If you feel there are other questions that
need to be added to this section kindly get in touch
with us at admin@indices.in. We will try and add those
questions.
|