In a mutual fund company--who are the cutomers and who are the suppliers?

Question

I was going thru a project and it mentioned Supplies as general public and customers as companies listed into it...is this true...or is it the other way round?...I m Confused...

Answer 1

Sounds like you're trying to fit a manufacturing model to a mutual fund company.  Doesn't work.

Answer 2

well, it's a bit of a weird analogy altogether because in truth, the customer is the investor; he is a customer of the body managing the mutual fund.

However, what it's getting at is that the public are the suppliers; they are supplying funding, the companies are the customers because they are receiving that funding.

Of course, the public are doing it to get a return and the companies are doing it to aid their expansion so it's a bit of a daft way of looking at it, but anyway, there's the answer.

Answer 3

A mutual fund is a financial product manufactured by the mutual fund company and sold to an end user.

Think about an ipod inside you have a hard drive, the screen, some electrical wiring, ect.  All these make up the ipod.  Apple buys these parts from suppliers and assembles everything into a cohesive unit called the ipod.

Now look inside the mutual fund it is made up of individual stocks and/or bonds that are packaged together and sold to the end user.  Who supplies these you ask, well a mutual fund company buys the individual peices from a prime brokerage who is thier supplier.

The investors are the customers who buy shares of the mutual fund because they are paying for an end product that has been assembled and manufactured.