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).
