Mutual Funds

A mutual fund is a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. Over the past 20 years, mutual funds have become increasingly popular. Once considered an obscure financial instrument, they are now a significant part of everyday investing. Many people view investing as synonymous with buying mutual funds, as they are often seen as a better alternative to letting cash sit idle in a savings account.

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Advantages of Mutual Fund

Professional Management:

A mutual fund is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor investments.

Diversification:

By owning shares in a mutual fund instead of owning individual stocks or bonds, your risk is spread out.

Economies of Scale:

Because a mutual fund buys and sells large amounts of securities at a time, its transaction costs are lower than you as an individual would pay.

Liquidity:

Just like an individual stock, a mutual fund allows you to request that your shares be converted into cash at any time.

Simplicity:

Buying a mutual fund is easy! Most Companies have their own line of mutual funds, and the minimum investment is small.

Types of Mutual Fund:

Classification of Funds

Debt Mutual Fund Hybrid Mutual Fund Equity Mutual Fund
Liquid Fund Equity Orient Balanced fund Diversified Growth Fund
Gilt Fund Debt Orient Balance Fund Sectoral Fund
Floating Rate Fund Children Plan Tax Saving Fund
Short Term Bond Fund
Income Fund
Monthly Income Fund

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