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Mutual Fund Units Mutual Funds (MFs) are investment vehicles that pool together the
money contributed by investors, which the fund invests in a portfolio of securities that reflect the common investment objectives of the investors. Each investor’s share is represented by the units issued by the fund.
The value of the units, called the Net Asset Value (NAV), changes continuously to reflect changes in the value of the portfolio held by the fund.
MF schemes can be classified as open-ended or close-ended. An open-ended scheme offers the investors an option to buy units from the fund at anytime and sell the units back to the fund. These schemes do not have any fixed maturity period. The units can be bought and sold anytime at NAV linked prices. The unit capital of closed-ended funds is fixed and they sell a specific number of units. Units of closed- ended funds can be bought or sold in the Stock Market where they are mandatorily listed.
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