Advantages of mutual funds and their concepts

[Surya17]

Hey I started trading business 1 years ago and I got good profit through my business. Now, I want to invest my some amount of capital(money) in mutual funds. I want to know the concept of mutual fund? What actually a mutual fund? How it work? What are their advantages I would get in investing my money in a mutual fund company? Can you help out in this process? I want to know how this work in my business?

[Masters]

Mutual fund is an assurance that pool money from a group of investors (allocation general financial goals) and invest the money thus collect into gain classes that match the stated investment objectives of the plan. Since the stated investment objective of a mutual fund plan usually forms the basis for an investor's decision to add money to the pool, a mutual fund can not diverge from its stated objectives at any point of time.
Each Mutual Fund is maintain by a fund manager, who using his investment organization skills and essential research works ensure much better return than what an investor can manage on his own. The capital approval and other income earn from these savings are passed on to the investor (also known as unit holders) in amount of the number of units they own.

[Career-Minded]

When an investor subscribe for the units of a mutual fund, he becomes part owner of the possessions of the fund in the same percentage as his contribution amount put up with the quantity (the total amount of the fund). Mutual Fund investor is also called a mutual fund share holder. Any modification in the cost of the investment made in the share market instruments [such as share, share price, debenture etc] is reflect in the Net Asset Value [NAV] of the scheme. NAV is termed as the market cost of the Mutual Fund scheme property net of its liability. NAV of a scheme is considered by dividing the market value of scheme's property by the total no. of units issue to the investors. For example as follows:

1. If the market value of the assets of a fund is Rs. 1,000,000
2. The total no. of units issue to the investors is equal to 100,000.
3. So the NAV of this scheme = (A)/(B), i.e. 1,000,000/100,000 or 10.00
4. Now if an investor 'Y' owns 10 units of this scheme
5. Then his total contribution to the fund is Rs. 100 (i.e. No. of units held multiplied by the NAV of the scheme)

[Zimic]

The concepts of mutual fund is quite simple if you are an investor u need to know some steps which are given as below:

1. Many investors who have a same financial objectives invest their money.
2. Investors, on a balanced basis, find mutual fund units for the sum contributed in the investment.
3. The money which is collect from the investors is invested into shares, Debentures & some other securities capital by the fund manager.
4. The fund manager realize the gains/losses and collects dividend or interest income.
5. Any capital gains/losses from such investments are passed on the investors in proportion of the number of units held by them.