Money is merely a piece of paper until you realize the importance of saving and making it grow spirally. On a broader view, a common man can think of two options, either put in shares offering attractive returns with an linked unknown risk or invest in the regular income debt options. Now the issue is: Is there a way in between so that you get good returns safety of investment like fixed income options. Yes, a Mutual fund is answer.

Mutual funds?

mutual fund is a fund commonly held by the investors who are the beneficiaries of the fund. It is kind of Investment Company which collects money from so many investors in common group and then invests this capital raised in variety of options like bonds, gold, real estate etc. At the heart of it are competently skilled people known as fund managers analyzing the markets situation and making investment decisions with an aim of maximization of return. Significantly all the earnings of a MF are conceded for the investors in share to their investments. In addition of the offered services, the mutual fund also charges some fees from the investors.

Why Need Mutual funds?

What if you don’t have time and skill to manage your group and need some competently skilled people to invest on your end? What if you are a trainee in the world of stock markets but still want to invest?

Mutual Funds – Major players Involved

There are various key players working together to achieve the common goal. These players and their role is what we discuss here.

Sponsor

A sponsor is an individual responsible for laying the bases of a fund. In real sense, it puts in the seed money in fund’s set up. Any registered company, a listed bank or financial organization can act as sponsor.

Governing Body

Mutual funds are comprised of trusts and have a board of trustees to run the fund. It is accountable for investor’s money detained in the fund.