 What are CONS of the free market (not pros!)? |
please help.
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Question | What is the motive for a company to start a mutual fund ? |
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Most of the profit generated by the Mutual fund is returned to the investors. The promoters of the fund get a fixed percentage fee as specified by SEBI. Is this so lucrative or am i missing something ?
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glib
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It is a service oriented business. Remember the company which runs the asset management company doesn't own the money and hence it is not their money. It collects money from investors and invests and produces returns. A good return compared to the competitor means more investors willing to invest their money with that AMC and hence more profit for the management.
I think you got the feeling because you thought it is AMC's money but in reality it is simply a trust doing investment on behalf of all the small investors and by pooling through small amount it builds-up a big asset to be influential and makes the best out of available opportunities.
Hope that answers your question in a better way.
Good luck. |
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OPM
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If it is the initial fund or set of funds, profit AND ego. Later, it is profit and meeting a customer demand.
Since demand is often irrational, some funds that are created really don't make sense outside the immediacy of the context of demand. |
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Tomel
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Profit. If you are in the business of managing stock and/or bond portfolios and can get named the as the manager of a mutual fund's portfolio, you earn an ongoing fee to perform those duties. The easiest way to be named as the manager of a mutual fund's portfolio is to organize the mutual fund yourself, going through the necessary legal and start-up process (which is neither simple nor inexpensive). |
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jputf
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MONEYYYYYYYYYYY
They want more money (the other people moneyyyyyyyy) |
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peanutzz52
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regardless of performance, the mutual fund company gets paid. |
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guide
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The company gets fee on the corpus managed it |
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Vishal D
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Mutual Fund is a company incorprated to arrange funds collected from people inorder to achieve a mutual goal that is investment.
THe asset Managers sitting of the MF companies invest fund in to equities, portofolios etc.
Now a days we have Mutual Funds with specific aim like investing in small mid caps, even investing in IPOs. |
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