What is the difference between mutual funds and the share market?
As seen in the article, the product classifications are quite different. So while mutual funds include a list of options, share market, investment is comprised of products with stocks, bonds, and further let it be real estate stocks, funds that sponsor stocks will by the nature hold a limited quantity of share market which provides for a greater total return whereas a high amount invested to mutual funds by a financial firm will not generate a high return.
With mutual funds, a firm investment on a client who individually holds a mutual fund is buying the fund. This product will be called a mutual fund, while if you decide to invest together with a firm for another mutual fund, the clients will be forced to buy that mutual fund. For example, if an individual client has to invest a small portion of her funds in one mutual fund to earn a relatively high return, she can opt for a high-return mutual fund that she is putting her money into.
Instead of investing her money only in the mutual fund, she may invest a larger amount in a real estate mutual fund, a mutual fund with funds that are invested in the very high return investing, and an amount she invests in a mutual fund with the minimal return but a higher return. This is because that mutual fund will have less weight in terms of a return from bonds and mutual fund which will be the latter of the two categories of mutual funds.
Recently, there have been interesting changes in terms of intermediaries for mutual funds and the share market. The first change can be noticed through the government to make a taxman friendly move. The government has decided that the taxpayers will be exempted from taxation on their investments for the entire money that has been invested in mutual funds.
However, the fact is that the inflows and inflow into mutual funds will happen not by simply investing money but also by bearing of the risk on the investments and planning. So the mutual funds themselves with strategies that have varying riskier investments could invest in an asset that is relatively riskier. So as to overcome that risk, they might buy another asset that they are confident of its ability to earn money and raise the risk on it. This is why the government expects that the mutual funds have to be in good marketing too. To develop a marketing plan, the mutual funds need to research the overall objectives and desires of the firms and their consumers. That research or development of strategy is done by the business firms. It is this strategy that is called corporate social responsibility of the firms that is very important for the firm. In fact, in my opinion, it helps them to present a better image of their businesses. The strategy to get out of a crisis by the economic crisis happened in 2008, as all the investors withdrew their funds from the risky investments. The financial institutions combined their market shares to withstand the crisis. But the stable, profitable, and suitable investments are developed that secured the basic investors’ interests. In fact, within the financial industry, mutual funds have been the saving deposits by the investors and the liquidity in them helps the clients to process the risks at a much higher rate. So the sales manager must understand the buyer’s needs and meet those needs accordingly. The client will be placed where he can present his better view.