TYPES OF MUTUAL FUNDS - Based on Structure

There are some classifications of Mutual Funds based on various factors. Normally based on their structure..

1) Closed-end Funds

After an initial period of opening for sale the fund gets closed for a pre-determined period. say normally 3 years and an investor cannot buy or sell (redeem) the fund units within the closed period. Some times to provide liquidity, the funds offer buy back of units, once a while or all the time, but with they charge CDSC load. So an investor may not be able to buy during this closed period, but can redeem his units, if he needs.

2) Open-end Funds

An investor can enter and exit all the time. The units are available for buying & selling at all times. An investor can buy units or redeem units from the fund itself at a price beased on the NAV per unit.

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LAUGH WITH MULLA

Mulla Nasrudin's son, home from college, was talking to his father about the "Law of Compensation," which he had studied. "If a person loses one eye," he explained, "the sight in the other becomes stronger. If he loses the hearing in one ear, the hearing in the other becomes more acute. If he loses one hand, he becomes more agile with the other." "I GUESS THAT'S RIGHT," said Nasrudin. "I HAVE ALWAYS NOTICED THAT WHEN A MAN HAS ONE SHORT LEG THE OTHER IS LONGER."