Mutual funds and their schemes
Mutual funds are associations of public members who wish to make investments in the financial instruments or assets of the business sectors or corporate sectors for the mutual benefits of their members.
The subscription amount collected by mutual funds is primarily intended to be channeled in capital market. Income distribution by way of dividends or capitalization of gains is made on the basis of revaluation of the stock holdings. Maintaining separate accounts for each scheme segregates the assets under each scheme. There is no objection in investing the amounts in money market instruments like commercial paper, certificates of deposits, treasury bills, bill re-discounting, etc.
Mutual funds invariable take delivery of the scripts purchased and in the case of scripts sold, give delivery thereof to the purchaser. For open end schemes, the first forty five days of subscription period should be considered for determining the target figure or minimum size.
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