International Research Journal of Education and Technology

Mutual fund savings create a confidence that can pool the investment of large number of investors who contribute to a general economic objective. Compared to direct investing in individual securities mutual funds have benefits and disadvantages. Mutual funds are managed by professional managers, provide economies of scale, higher level of diversification. On the other hand, mutual fund investors have to pay various fees and expenses and the income in the mutual fund is can’t be predictable. The fund manager in a mutual fund known as the portfolio manager, realizing capital gain or loss, trades the fund’s underlying securities,and collects the dividend or interest income. The net asset value per share (NAV) is the value of the mutual fund and it is calculated on daily basis on the total value of the fund divided by the number of shares currently issued and outstanding.