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Where Do You Go To Buy Mutual Fund?
 
Mutual Fund is also as unit trust in other countries. Basically, you pool your money together with other small time investors and the big financial institutions for the common purpose of investing in the financial markets.
 
There are a few ways to buy mutual funds. You can buy direct from the mutual fund companies or through financial institutions like the banks and insurance companies. Many banks sell their own mutual fund products. Some banks do not manage their own mutual funds but they sell mutual funds managed by other financial insititutions. Many insurance companies also manage their own mutual funds. You can buy into the mutual funds managed by insurance companies through their insurance agents. However, mutual funds from insurance companies tend to under perform those offered by other financial institutions. They are also normally package with insurance coverage for which you would have to pay a premium.
 
In recent years, Internet Fund Houses have gained momentum because of the easy accessibility conferred by the internet. Just a few clicks of the mouse is needed if you can an existing customer.
 
Mutual funds will charge a sale fee or management charges. If you read the financial newspapers, you will see 2 prices quoted for each mutual funds. The higher price is the one you pay when you buy into the mutual funds. The lower price is what you would get when you sell to cash out. The difference between the 2 prices would be the sale charge. It is usually around 5%. However, Internet Fund Houses tend to charge a lower 2%. Some funds have only one quote. That means that they will deduct the sale charge direct from your investment before they allocate the units to you. On top of the sale charges, investors need to pay around 1% in administratiob fee annually. Sometimes, it is deducted from the number of allocated units on a daily or monthly basis.