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Mutual Fund

Mutual funds are like an investment vehicle which comprises of pool of money from various investors to invest in different asset classes according to their common objectives. These were designed to provide professional money management services to retail clients which were accessible to only HNIs earlier. The money could be invested in a variety of instruments ranging from stocks, bonds, government securities, debentures, etc. The small ticket sized capital is collected together and managed by the professional called the fund manager. A fund manager is responsible to produce capital gains and income for the fund investors. There are two major ways a fund is operated: open-ended and close-ended. In open-ended, an investor can enter and exit at any point in time while in close-ended, an investor can invest only during the initial period and will be automatically redeemed on the maturity date.

Mutual fund investments give you the advantage of professional management, lower transaction costs, and diversification, liquidity and tax benefits.

Types of Mutual Fund

  1. Equity
  2. Hybrid
  3. Debt
  4. Solution oriented Schemes
  5. Other Scheme


  1. Disciplined investment approach
  2. Low transaction cost
  3. Liquidity and Tax benefits
  4. Diversification of portfolio
  5. Reduced risk of investing
  6. Effective to build habit of savings and investments
  7. To get investments managed by a finance professional
  8. diversify investment portfolio

Who should invest in Mutual Fund?

  • Suitable product for retail investors with limited financial knowledge
  • Preferably for new investors in the capital market
  • Investors looking to save tax and still make good returns on investments
  • Individuals looking to build wealth over a period of time
  • Investor looking for easy liquidity products