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| A mutual fund is managed by an Asset Management Company (AMC). The AMC creates a mutual fund, and invites the public to subscribe in the mutual fund with their investment. Units of the funds are allotted on Net Asset Value (NAV) of the fund at the point of time. Unlike other investments, the mutual fund itself is not traded nor does it offer guaranteed returns like a deposit. The mutual fund's Net Asset Value (NAV) determines the value of the investment. Investors redeem their investments in the mutual fund on the basis of the NAV from the mutual fund itself (this is repurchase of units by AMC). |
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