As the name suggests, a ‘Mutual Fund’ is an investment vehicle that allows several investors to pool their resources in order to purchase stocks, bonds and other securities. These collective funds (referred to as Assets Under Management or AUM) are then invested by an expert fund manager appointed by a mutual fund company (called Asset Management Company or AMC). The combined underlying holding of the fund is known as the ‘Portfolio’, and each investor owns a portion of this portfolio in form of units.
Mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the change in the total market cap of the fund—derived by the aggregating performance of the underlying investments.
Securities and Exchange Board of India (SEBI) was first established in 1988 as a non- statutory body for regulating the securities market. It became an autonomous body on 12 April 1992 and was accorded statutory powers with the passing of the SEBI Act 1992 by the Indian Parliament. SEBI has its headquarters at the business district of Bandra Kurla Complex in Mumbai and has Northern, Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai, and Ahmedabad respectively. It has opened local offices at Jaipur and Bangalore and has also opened offices at Guwahati, Bhubaneswar, Patna, Kochi and Chandigarh in Financial Year 2013–2014.
