Question

how does the popularity of mutual funds impact rights of shareholders? (200 words)

Answer 1

Popularity of the mutual fund will be impacting the rights of the shareholders because popularity of the mutual funds will be meaning that the rights of shareholders will be the primary motive of the mutual funds to be protected as Mutual Funds will be working in the direction of maximizing the value of its shareholders and providing them with the better scope of maximizing the rate of return and not engaging in high risk trades.

Mutual Funds managers are generally working as agents for this holders as they are trying to take care of the the interest of shareholder by maximizing the rate of return and not investing their money into the risky assets as which can lead to risking of their money and capital or so they will be trying to take calculated risk in order to maximize the rate of return of the shareholders and they will be responsible as the agents of the shareholders and stakeholders will be their principal so Mutual Funds will always try to maintain their exposure within the specified framework, so that they will be reducing the risk and maximizing the rate of the return of the shareholder so it can be said that Mutual Funds are focused upon protecting the interest in the rights of the shareholders by taking appropriate risk exposures and reducing the risk and investing into the securities which will be maximizing the return and they will be trying to outperform the market and they will also try to distribute additional profits as dividend and capital gain so, Mutual funds managers will be trying to protect the rights of the shareholders.