Money matters series, In our previous article “Mutual funds – Sahi Hai?“ we discussed what is Mutual Funds.
And what it basically comprises of.
why people should invest in it.
Let’s take it further
and discuss more it in detail
as Money Matters.
So, basically, Asset Management Companies (AMC) are the one that starts mutual funds.
Investors like you and me give our money to Asset Management Company. With that money, AMC does investment in various programs by taking advice from experts.
They originally have a team of experts, who suggest AMC where to invest and where not.
And after collecting interest from all the investment AMC takes its cut of around 1% or maybe more, depends on company to company
and rest they return to investors as profit.
HDFC, HSBC, ICICI, Aditya Birla, Reliance, TATA are some of the few reputed names from Indian industry who have started their own AMCs.
Risk factor and Return rate all depends upon the mutual fund you are investing
Some mutual fund provides a return of 4% other may provide a return on 30%
If AMC investing your money in stocks then it will be riskier but at the same time will get you more interest
on the other hand, if they are investing in government bonds then risk factor may decrease but along with it, interest will also drop down.
So if Money Matters then choose wisely and read all the documents related to mutual funds and AMC carefully.