NISM-Series V-A: Mutual Fund Certification Exam Notes
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When a scheme is first made available for investment, it is called a 'New Fund Offer' (NFO). The money mobilized from investors is invested by the scheme as per the investment objective committed.
The relative size of mutual fund companies is assessed by their assets under management (AUM). The AUM captures the impact of the profitability metric and the flow of unit-holder money to or from the scheme.
Lack of portfolio customization and an overload of schemes & scheme variants are drawbacks of mutual funds.
Investment objective defines the broad investment charter. Investment policy describes in greater detail, the kind of portfolio that will be maintained. Investment strategies are decided on a Day-to-day basis by the senior management of the AMC.
Open-Ended Schemes do not have a fixed maturity. Investors deal with the Mutual Fund for your investments & Redemptions. The key feature is liquidity. Investors can conveniently buy and sell your units at Net Asset Value (NAV) related prices, at any point of time.
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