Here is a collection of must-see videos that will help you understand the world of mutual funds. Happy Investing!

Financial discipline is similar to going on a diet. It is never easy. There are plenty of temptations - an urge to over spend, letting emotions control your investments and confusion due to the problem of plenty - look at the plethora of options available in the market, with the returns of one scheme trying to beat the other. Who does one turn to for advice? Dependency on one person or your financial advisor alone is also tricky. Which is why people often turn to mutual funds.

The argument here is that experts are taking care of your investments. Depending on your investment appetite and risk appetite, mutual funds come with a good mix of both equity and debt, which helps you earn an interest of 12-15% or more depending on the type of investment schteme you have picked and how the markets have performed overall. Yet, selecting a mutual fund can be confounding due to the raft of choices available.

Episode 11 I Beginner

Open-ended Funds

What are open-ended mutual funds?

Open-ended mutual funds do not have a restriction in terms of the number of units they can issue. Although, if an open-ended mutual fund becomes too big, then the fund manager can choose to not accept any more subscriptions from investors.

In an open-ended mutual fund, an investor can buy units in the fund directly from the fund itself. All mutual funds, including open-ended mutual funds, are actively managed by fund managers who charge investors a small fee for their services. An investor can buy or sell units in these mutual funds even after the initial offering period is over.

Most mutual funds are open-ended, which means an investor can buy or sell them at any point. Since investors can redeem their investments in an open-ended mutual fund whenever they want, such funds have to maintain a certain amount of cash reserves to meet these redemptions.

All units in an open-ended mutual fund are bought and sold at the net-asset value declared by the mutual fund.