BMC Junior Clerk Recruitment General merit List part-1
Bhavnagar Municipal Corporation
RECRUITEMENT OF THE POST OFJunior Clerk (class-3)
Advertisement No. BMC/201920/5
Marks of the Written Exam held on Dt.-15/12/2019, SUNDAY
What are Mutual Funds
Mutual fund is a financial instrument which pools the money of different people and invests them in different financial securities like stocks, bonds etc. Each investor in a mutual fund scheme owns units of the fund, which represents a portion of the holdings of the scheme. The securities are selected keeping in mind the investment objective of the scheme. Mutual funds are managed by asset management companies (AMCs). AMCs appoint fund managers to manage different mutual fund schemes and ensure that the scheme investment objectives are met. For fund management and other services provided by AMCs, a fee is charged to the investors.
Let us now discuss mutual fund tax benefits
Risk Diversification: One of the biggest advantages of mutual funds is risk diversification. Every stock is subject to three types of risk – company risk, sector risk and market risk. Company risk and sector risk are unsystematic risk, while market risk is known as systematic risk. Mutual funds help investors diversify unsystematic risks by investing in a diversified portfolio of stocks across different sectors. Hence mutual fund risk is much lower than individual stocks.
Mutual funds are investment vehicles that pool money from many different investors to increase their buying power and diversify their holdings. This allows investors to add a substantial number of securities to their portfolio for a much lower price than purchasing each security individually.