What are MF

What are Mutual Funds? A mutual fund is a pool of money managed by a professional Fund Manager, who invests the same in equities, bonds, money market instruments and/or other securities according to the investment objective of the fund.

Benefits of Mutual Funds

1. Diversification: One of the biggest advantages mutual funds give you is that of immediate diversification. You may not have enough money to spread your investments across asset classes, but by pooling money from thousands of similar investors, a mutual fund spreads your investment and hence, your risk. It ensures that you have not kept all your eggs in one basket and are safe from incurring huge losses from a single bad investment.

2. Professional Management: Another big benefit of investing in mutual funds is the professional expertise it provides for your investments. Asset Management Companies (AMCs) provide qualified fund managers who, with the help of strong research teams and their own expertise, pick the best options to meet the fund's objective. This saves you time and the stress of constantly monitoring your investments and wondering if you made the right buy or sell decision. With mutual funds, you do not have to worry about market swings.

3. Affordable: You may want to buy shares of large companies or want to invest in big companies in a particular sector of choice. However, you may not have the money to make a big investment. Mutual funds trade in big volumes, giving their investors the advantage of lower trading costs.

Anyone can start an investment in a mutual fund through a Systematic Investment Plan (SIP) with as little as Rs 500.

4. Well Regulated: In India, all mutual funds are regulated by the Securities and Exchange Board of India (SEBI). All mutual funds are required to follow transparent processes, as laid down by SEBI, protecting the interest of investors. Further, SEBI makes it compulsory for all mutual funds to disclose their portfolios every month

Types of MF