Mutual Fund Online Investment-Mutual Fund Asset Classes

The structure of mutual funds in India is governed by SEBI(Mutual Fund)Regulations, 1996.

It is mandatory to have a three tier structure of

Sponsor-Trustee-Asset Management Company.

The Sponsor is the promoter and he appoints the Trustees who are responsible to the investors of the fund. AMC is the business face of the mutual fund as it manages all the affairs of the fund

What Are Mutual Fund Classes?

A single mutual fund, with one portfolio and one investment adviser, may offer more than one "class" of its schemes to investors. Each class represents a similar interest in the mutual fund’s portfolio. The principal difference between the classes is that the mutual fund will charge you different fees and expenses depending upon the class that you choose.

What Types of Fees and Expenses Will I Pay?

Check the fee table in the mutual fund’s prospectus to find out the precise amount of the mutual fund’s fees and expenses, Godmind advisor will answer all your queries regarding the expenses of investments and will recommend a fund at low cost and high profitability.

If You Buy Class A Schemes:

Class A schemes typically charge a front-end sales charge. When you buy Class A schemes with a front-end sales charge, a portion of the rupees you pay is not invested. Class A schemes may impose an asset-based sales charge, but it generally is lower than the asset-based sales charge imposed by the other classes.

A Word about Mutual Fund Expenses.

Like most investments, all mutual funds charge fees and expenses that are paid by investors. These fees and expenses can vary widely from fund to fund or fund class to fund class. Because even small differences in expenses can make a big difference in your return over time, Godmind Advisors help you to compare how sales loads, fees, and other mutual fund expenses can impact your return.

Efficient Portfolios.

Every investor has unique financial objectives, investment attitudes and risk tolerance levels. An efficient portfolio is designed to provide the highest expected return for a chosen level of risk.

As illustrated in the graph, the efficient frontier is a theoretical line that connects all efficient portfolios, or the greatest expected return for an investor's chosen level of risk.

If You Buy Class B Schemes:

Class B schemes typically do not charge a front-end sales charge, but they do impose asset-based sales charges that may be higher than those that you would incur if you purchased Class A schemes. Class B schemes also normally impose a contingent deferred sales charge (CDSC), which you pay when you sell your schemes. For this reason, these should not be referred to as "no-load" schemes. The CDSC normally declines and eventually is eliminated the longer you hold your schemes. Once the CDSC is eliminated, Class B schemes often then "convert" into Class A schemes. When they convert, they will begin to charge the same asset-based sales charge as the Class A schemes.

Class B schemes do not impose a sales charge at the time of purchase. So unlike Class A purchases, all of your rupees would be immediately invested. But your expenses, as measured by the expense ratio, may be higher. You also may pay a sales charge when you sell your Class B schemes.

If you intend to purchase a large amount of Class B schemes, you may want to discuss with your financial adviser at Godmind whether Class A schemes would be preferable. The expense ratio charged on Class A schemes is generally lower than for the Class B schemes

If You Buy Class C Shares:

Class C schemes usually do not impose a front-end sales charge on the purchase, so the full rupee amount that you pay is immediately invested. Often Class C schemes impose a small charge if you sell your units within a short time of purchase, usually one year. Class C schemes typically impose higher asset-based sales charges than Class A schemes, and since their schemes generally do not convert into Class A scheme, their asset-based sales charge will not be reduced over time. Class C schemes are often used for asset-allocation purposes.

Class C schemes do not impose a sales charge at the time of purchase, but they may impose a CDSC (Contingent Deferred Sales Charges), or other redemption fees. Additionally, in most cases your expense ratio would be higher than Class A schemes, and even than Class B schemes if you hold for a long time!