NewsLiquid Mutual Funds

Liquid Mutual Funds


In a mutual fund, the funds of several investors are put together and used to buy a wide range of financial products, such as stocks, bonds, money market instruments, and more. Experts manage mutual funds using the fund’s assets to create financial gains or income for the fund’s shareholders. Mutual fund portfolios are constructed and managed to meet the stated investment objectives in the prospectus.

Small and individual investors may access professionally managed portfolios of stocks, bonds, and other assets via mutual funds, which are investment vehicles for pooling their money. As a result, each investor gets a piece of the fund’s profits or losses. Mutual funds invest in a wide range of assets, and their performance is often measured by the change in the fund’s total market value, which is calculated by aggregating the performance of the underlying investments.

Fixed-income assets such as certificates of deposit, treasury bills and commercial papers that expire in less than 91 days are invested in liquid mutual funds. You don’t have to commit to anything if you have cash. On business days, requests for liquid cash are completed within 24 hours.

Liquid funds like Navi Mutual funds tend to be relatively low-risk investments. Since they often invest in short-term, high-quality fixed-income securities, liquid funds are considered the least dangerous of all debt fund types. As a result, investors wary of taking on further risk may look at these options.

Mutual Fund Investment

Liquid Mutual funds aggregate client funds and utilise them to purchase other assets, most often stocks and bonds. The performance of the assets purchased determines the worth of the mutual fund corporation. To put it another way, when you buy a mutual fund unit or share, you acquire a percentage of the portfolio’s value. Purchasing shares in a mutual fund differs from purchasing stock. Unlike publicly traded companies, shares of mutual funds do not give investors the power to vote. Instead of a single stock, a unit of a mutual fund is made up of a variety of securities.

So the price per share of a mutual fund’s net asset value (NAV) is known (NAVPS). To calculate a fund’s NAV, the entire market value of the fund’s holdings is divided by the total number of outstanding shares. Shareholders, institutional investors, and employees all have a stake in a firm. Therefore, shares in mutual funds are normally purchased on the MF’s current net asset value (NAV), as opposed to stock prices, which vary throughout the trading day and settle by the time the trading day ends. Therefore, it may be said that mutual fund prices will fluctuate in tandem with the NAVPS.

Over a hundred different assets are invested by a typical mutual fund, allowing investors to diversify their portfolios at a reasonable cost. For example, someone buys up all of Google’s stock before the company experiences a bad quarter. They might lose a lot of money because they have all of their assets linked to a single company. On the other hand, a private investor may invest in a mutual fund that holds Google stock. When Google has a bad quarter, the fund suffers a loss due to its tiny percentage of the fund’s assets.

Risk of Liquid Funds

Liquid mutual funds have low volatility since the assets they invest in expire in only 91 days. That liquid funds’ NAVs are more stable than other forms of debt funds’ is a strong indication. Consequently, investors concerned about taking on too much risk might choose this kind of mutual fund.

Liquid funds, like any other investment, do contain some risk. For example, if the credit ratings of the underlying securities fluctuate, the fund’s NAV may change. As a result, even readily available money carries some risk. On the other hand, the short maturity duration of the underlying assets decreases the associated risks.


Investors should also remember that corporations are not required to pay dividends on their shares. Therefore dividends are not guaranteed. However, dividend-paying mutual funds may be a better choice for investors looking for dividend income than individual shares since the latter pool possible dividend payments from several firms. In addition, because the money invested is distributed over hundreds of firms, a mutual fund helps mitigate the risk of falling stock prices.

Latest news

Why Are HR Services and Health Benefits Crucial to Your Company’s Success

Human resource (HR) is critical in improving employee engagement, productivity, and developing a positive business culture. Remember, a motivated...

How To Choose The Right Office Partition System For Your Needs

One of the most important decisions you’ll make when it comes to your office space is selecting the right...

10 Reasons You Should Consider a Private Bus Charter

Why charter a private bus? There are plenty of reasons to charter a private bus! Whether you’re looking to...

PMBOK Guide, the PMI-ACP Book

If you want to pass the PMI-ACP exam, you will need a good book to help you prepare. There...

Hey there gentlemen, here are the coolest deals for men’s wedding wear

The days when the only options for mens wear wedding attire were safari suits, kurtas, or beige and gold...

Everything to know about custom Instagram decals

Yes, it is possible to create custom Instagram decals. This can be done by using a professional printing company...

Top Categories

You might also likeRELATED
Recommended to you