Q. Which of the following scheme/schemes is/are offered by mutual funds?
1.Open ended schemes
2.Closed ended schemes
3.Exchange traded funds
Choose the correct answer from below given codes:
Explanation: There are three types of schemes offered by MFs:
- Open-ended Schemes: An open-ended fund is one which is usually available from an MF on an ongoing basis, that is, an investor can buy or sell as and when they intend to at a NAV-based price.
- Closed-ended Schemes: A close-ended fund usually issue units to investors only once, when they launch an offer, called new fund offer (NFO) in India. Thereafter, these units are listed on the stock exchanges where they are traded on a daily basis.
- Exchange-Traded Funds (ETFs): ETFs are a mix of open-ended and close-ended schemes. ETFs, like close-ended schemes, are listed and traded on a stock exchange on a daily basis, but the price is usually very close to its NAV, or the underlying assets, like gold ETFs.
Source: TMH Ramesh Singh