What is a Mutual Fund?

The industry of mutual fund is an industry that is a part of the fast growing segments in the financial sectors of especially Canada. Due to the sales in this country the majority of the assets have slowly been growing at a very fast rate. The shares of these assets that have been held with the foreign funds are also increasing at a good rate over the past few years. Now in the country of Canada we have about eighty mutual fund management companies operating there. This industry is now moderately concentrated with the top companies according to about seventy five percent of the assets. There are now about one hundred and forty four firms that are now dealing with the same of these funds. In the total this industry now in Canada is employing about ninety thousand people.

Types of Mutual Funds

The major types of these schemes are those that are related to the bond finds, the market funds, the dividend funds, the equity funds, the real estate funds and the mortgage funds. In the year of 2001 there were like thousand eight hundred such financial fund managers like this in this country of Canada that were representing the fifty million unit holder accounts. The financial industry can normally be divided easily into the manufacturers of these funds and also the distributors even though the banks, the caisses populaires and the credit unions are all involved in the industry on both the sides.

Those companies that are involved only in the manufacture of these schemes do tend to many a times distribute the funds through the investment advisors, the mutual fund dealers, the financial planners and also the insurance agents while the credit unions, the banks the caisses populaires do distribute the product of the funds through their retail branches everywhere in the country of Canada via their brokers.

How do mutual funds make their revenue?

The manufacturers and also the distributors do get the revenue from one of the three main categories of the fees which are the sales fees, the management fees or the special fees. The special fees are the fees which are very specific to the costs of the administration. The sales fees are those fees that are needed to pay for both selling as well as buying of the fund units. The management fees are all that fees that is needed to pay for the funds that are managed. This is done by the management.

The industry is governed by both the territorial as well as the provincial legislations that do regulate the underwriting, the sale of the securities and also the distribution. At the same time there is also a self regulation that is extensive by the investment dealers who have an association that is Canada based the stock exchanges and also the dealers of the mutual funds association of the country of Canada. Nowadays there are many such people and organizations in the country of Canada which are basking for a year of returns that are double digits.