Question

in a few words, what is the difference between mutual and standard fund?

Answer 1

To put it simply mutual fund is a pool of money in which investments are made in shares of different companies as well as bond instruments. Mutual funds can be equity funds – these funds invests in stocks of different companies, debt funds – these funds invest in fixed income government securities like treasury bills and bonds or reputed corporate deposits and hybrid funds – these funds invest in both equity and fixed income funds to balance the risks and maintain a certain return rate.

Standard fund invests in stocks of companies with the objective of earning a combination of dividend income and capital gains. It should be noted that for mutual funds the primary objective is long term capital appreciation i.e. capital gains but a standard fund focuses both on dividend income as well as capital gains. The stocks in a standard fund reflect the market as a whole while the stocks in a mutual fund may or may not reflect the market as a whole, depending on the type of mutual fund and its objective.