All videos · NISM Series V-A · Chapter 3
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Who actually owns your mutual fund money?
A mutual fund in India is a trust. Investors' money belongs to the trust, not to the sponsor or the AMC, which only manages it.
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The full concept: The three-tier structure
Worked example: XYZ Bank (sponsor) sets up XYZ Mutual Fund as a trust, appoints XYZ Trustee Company to hold it on behalf of investors, and the trustees appoint XYZ Asset Management Ltd to run the schemes.
Exam trap: The mutual fund is the trust; the AMC is a company that manages it. Investors' money belongs to the trust, not to the sponsor or the AMC.
