Difference between Fund unit and Shares.pptx

A mutual fund is a type of investment vehicle that pools money from many investors to invest in a diversified portfolio of securities such as stocks, bonds, money market instruments, or other assets. The fund is managed by professional fund managers, who make investment decisions on behalf of the investors

1. Fund unit Vs Shares Dr.Lavanya M.R Assistant Professor Sri Ramakrishna College of Arts and Science

2. Mutual Fund Units Company Shares (Equity) 1.Meaning Units represent your proportionate ownership in a mutual fund . Shares represent your ownership in a company . 2.Issued By Asset Management Companies (AMCs) managing mutual funds. Public or private companies listed on stock exchanges. 3.Ownership Type Indirect – in a pool of assets managed by professionals. Direct – in a company’s equity and voting rights.

3. Mutual Fund Units Company Shares (Equity) 4 . Price Determination Based on Net Asset Value (NAV) , updated daily. Based on market demand and supply , changes every second. 5.Trading Platform Bought/sold through mutual fund platforms or AMCs . Traded on stock exchanges (e.g., NSE, BSE) in real time. 6.Volatility Generally lower (due to diversification). Higher (depends on company performance and market news).

4. Mutual Fund Units Company Shares (Equity) 7.Dividends/Returns Returns come from dividends, interest, and capital gains. Returns come from dividends and capital appreciation. 8.Voting Rights No voting rights in companies held by the fund. Shareholders usually have voting rights in company matters. 9.Management Professionally managed by fund managers. You manage your own shares (unless using a portfolio manager).

5. Mutual Fund Units Company Shares (Equity) 10.Liquidity High (especially for open-ended funds) but not real-time . Very high – can be traded instantly during market hours. 11.Minimum Investment Can be very low (e.g., ₹100 via SIP in India). Requires enough to buy at least one full share.