Who owns mutual funds

Most know that mutual funds hold stocks, bonds or money-market securities. People put money into the box with the expectation that their outlay will increase in value, though for the past three years, stock-fund investors have learned that isn't necessarily the case. You may change your billing preferences at any time in the Customer Center or call Customer Service.

You will be notified in advance of any changes in rate or terms. You may cancel your subscription at anytime by calling Customer Service. Skip to Main Content Skip to Search. The fund managers do the research for you.

They select the securities and monitor the performance. This helps to lower your risk if one company fails. Most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases.

Mutual fund investors can easily redeem their shares at any time, for the current net asset value NAV plus any redemption fees. Money market funds have relatively low risks. By law, they can invest only in certain high-quality, short-term investments issued by U. Bond funds have higher risks than money market funds because they typically aim to produce higher returns. Because there are many different types of bonds, the risks and rewards of bond funds can vary dramatically.

Stock funds invest in corporate stocks. Not all stock funds are the same. Some examples are: Growth funds focus on stocks that may not pay a regular dividend but have potential for above-average financial gains.

Income funds invest in stocks that pay regular dividends. Sector funds specialize in a particular industry segment. Target date funds hold a mix of stocks, bonds, and other investments. Target date funds, sometimes known as lifecycle funds, are designed for individuals with particular retirement dates in mind. They also offer three ways to earn money: Dividend Payments. A fund may earn income from dividends on stock or interest on bonds. The fund then pays the shareholders nearly all the income, less expenses.

Capital Gains Distributions. The price of the securities in a fund may increase. When a fund sells a security that has increased in price, the fund has a capital gain. At the end of the year, the fund distributes these capital gains, minus any capital losses, to investors. Increased NAV. A mutual fund is set up either in the form of a trust or an investment company. The trustee holds the property of the trust for the benefit of its unit holders. Whereas, under the investment company structure, the mutual fund is established as a public listed company.

The AMC, as sponsor of the mutual fund, appoints its board of directors to manage its affairs, and a custodian for holding all the assets of the investment company. Participants are the ones investing in a mutual fund and anyone holding valid Pakistani computerized national identity card is eligible to become participant to a mutual fund. A trustee in the case of Mutual funds is a holding service who has administrative power for managing the money, property or assets used in mutual funds.

The trustee can be an individual person, member of the board of directors, a company or a bank appointed with the approval of the SECP.

A custodian generally acts as a caretaker or watchdog mainly responsible for monitoring the operations of the mutual fund and actions of the fund manager and other parties related to the mutual fund. A custodian ensures that a mutual fund is being managed in accordance with the requirements stipulated under the regulatory framework and the constitutive documents of the mutual fund.

The AMC may itself act as a registrar, or appoint the registrar to perform following functions:. Facebook Twitter. We do not sell or recommend any investment product.