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Mutual Fund Units
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What are Mutual Fund Units?
Just as shares represent the extent of equity ownership in a company, units represent our extent of ownership in the mutual fund scheme.
For example, if we invest Rs. 5000 in a mutual fund scheme
and the scheme NAV is, say, Rs. 50,
We get Rs. 5000 / Rs. 50 = 100 units
i.e we own 100 units of the scheme.
This is something similar saying, lets say, holding 100 shares of a company.
If NAV of the scheme goes up to Rs. 60, the value of our investment goes up to 100 units x Rs. 60 = Rs. 6000
Related Topics
- Introduction to Mutual Funds
- New Fund Offer (NFO)
- Ongoing New Fund Offers (NFO)(List updated on Feb 21, 2017)
- Net Asset Value or NAV
- Know Your Customer / KYC
- Expense Ratio
- Systematic Investment Plan and Compounding effect
- SIP vs Lumpsum Investments
- DIRECT plan vs REGULAR plan
- GROWTH option vs DIVIDEND option