OPEN ENDED MUTUAL FUND

OPEN ENDED MUTUAL FUND – Today we will try to understand OPEN ENDED MUTUAL FUND in this topic, and will know what is open ended mutual fund? What are the special features of OPEN ENDED MUTUAL FUND and what are the benefits of investing in it?

Any MUTUAL FUND is of two types according to its structure and maturity period-

1. OPEN ENDED MUTUAL FUND
2. CLOSE ENDED MUTUAL FUND

What is open ended mutual fund?

Any mutual fund can be of two types, OPEN ENDED or CLOSE ENDED

OPEN ENDED MUTUAL FUND As the name suggests, in this type of mutual fund, there is no fixed time for the investor to ENTRY (buy) and EXIT (sell), and it is absolutely open, the investor can take ENTRY anytime. can and can EXIT anytime,

When there is no such entry and exit time limit in a mutual fund, then such mutual fund is called OPEN ENDED MUTUAL FUND (Open Ended Mutual Fund).

In OPEN ENDED MUTUALFUND, there is no restriction to issue new units to the mutual fund company, it is to be noted that most of the MUTUAL FUNDs are OPEN ENDED like this,

But at the same time, when the money deposited in an OPEN ENDED fund becomes too much, then the mutual fund manager can convert that fund into CLOSE ENDED FUND according to his convenience to manage the fund.

And in this way, once a fund becomes a CLOSE ENDED FUND, then there is a ban on the entry of new investors in it.

Special features of OPEN ENDED MUTUAL FUND

Let us look at some of the features and highlights of open ended mutual funds –

1. There is no restriction on the entry and exit of the investor in the open end fund.
2. In OPEN ENDED FUND his UNIT is bought and sold at NAV of Mutual Fund,
3. In OPEN ENDED mutual fund, the company can issue as many new mutual fund units (UNIT) as it wants, there is no restriction on the number of units.
4. OPEN ENDED MUTUAL FUND Sometimes it becomes so big that to meet the objectives of that mutual fund investment, its manager has to decide that this open fund should be converted into close ended fund,

Benefits of investing in OPEN ENDED MUTUAL FUND

Let us now look at the advantages of investing in open ended mutual funds-

1. LIQUIDITY – The biggest advantage of investing in open ended mutual funds is that whenever the investor wants to sell his investment at NAV PRICE, he can CASH that investment, and in this way investing in OPEN ENDED MUTUAL FUND is very simple in terms of LIQUIDITY and convenient,
2. Investment amount and time- Most open ended mutual funds do not have any time limit, and the amount of investment is also small, which is a very convenient investment for a common investor.
3. NAV PRICE IS FINAL PRICE – NAV is its FINAL PRICE in an open-ended mutual fund, on which units of that mutual fund are bought and sold, and thus NAV is its FINAL PRICE,
4. Buying and selling of open ended mutual funds – Buying and selling of open ended mutual funds is done at its NAV i.e. BOOK VALUE, and DIRECTLY the mutual fund units are redeemed by the company itself, i.e. OPEN ENDED MUTUAL DIRECTLY bought and sold by the company goes,
   OPEN ENDED MUTUAL FUND – APPLICATION AND SUMMARY
   In this post, we have learned about OPEN ENDED Mutual Fund, in this way, whatever we have learned, as far as it is concerned to implement that information –

We should keep in mind that if a mutual fund is open-ended, then what are its benefits,

And also if we want to make any investment, in which we need better LIQUIDITY, then we should invest in open ended mutual funds.

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