What are Mutual funds? Understanding Mutual funds basics

What are mutual funds?

Chapter 1 – What are Mutual Funds?

Mutual funds is a buzz word today, with the lucrative returns that Indian Markets have to offer everyone wants to ditch the FD’s and regular Post office savings.Every Investor today wants to make an investment in avenues that give returns that are higher, but not everyone has the time or the knowledge to hunt for avenues to make Investments.

What are Mutual Funds?

A mutual fund is a pool of money from investors of all ticket sizes. This pool of money is invested in the various avenues of the market, by expert fund managers. They investors can make or withdraw the amount any time they wish.

Hence, investing in Mutual funds is much simpler than, making an investment in shares or bonds on your own.

What you need to know about Mutual Funds?

  • Professionally Managed: Each Mutual Funds House has professional wealth managers who use the money to create a diversified portfolio.Where, a portfolio may consist of either Shares, bonds, money market instruments, or, a combination of them. The professional’s micro manage and monitor the growth of the funds to ensure that the risk is minimal.
  • Ownership: As an investor, you purchase a limited number of shares in the mutual fund and not the individual securities directly. The benefit that you get is that, you get to be a part of the large pool of money invested. The losses and profits of the funds are proportionately shared by the investors to the tune of their investment.
  • Diversified: Your risk is minimized because, the investment you make is diversified in various avenues. So, you do not have to worry about the volatility of an individual security.
  • Liquid: Redemption of a mutual fund can be done anytime. The redemption is done at current NAV

Do not waste a single penny in trading the wrong way. Take advise from wealth managers and know How to invest in a right way.

Continue to Chapter 2 – How Mutual funds Work?

यह ब्लॉग हिंदी में पढ़े- What is Mutual fund in Hindi

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