What is a fund?

A fund is a collective investment pool made by many investors with a common investment objective. This pool of money is used to purchase a portfolio of financial securities (T- bills, Fixed deposits, Commercial papers, and Trust certificates). In exchange for the money invested, the fund issues units to each investor, who are then known as unit holders. A fund is set up by a Trust Deed and is an independent legal entity. It has its own financial accounts and files tax returns. The Trust is administered by its Trustee, which is a licensed commercial bank.