Question

1. What information are mutual funds required to report to investors?
2. How much of the funds’ earnings must be distributed to investors in order to qualify as an investment fund?
3. What is a factor? What service do they provide?

Answer 1

1) The mutual funds are also required to send annual report or abridged annual report to the unit holders at the end of the year.

Also they need to share the fund manager, fund portfolio, fund value, number of shares, performance of the fund, Tax benefits and major share holders and general aspects of the fund

2) The distribution of earning is solely based on fund earnings and decision of AMC

there is no cap or guarantee in mutual funds

3) A factor is the Type of risk in which various funds or the porfolio in which the customer can choose.

For eg: high rish high return, moderate risk moderate return,low risk low return

based on age and risk aversion there are portfolios which can be chosen

they help to analyse our risk aversion