What is a Mutual Fund?
A Mutual Fund is a fund that collects money from Investors & invests across different asset classes. In simpler terms, Mutual funds are like baskets. Each basket holds certain types of Stocks/Bonds for one mutual fund Portfolio. Mutual funds are managed by highly skilled & experienced Professionals/ Fund managers.
What We Do
Though due to lack of Knowledge & time investors are unable to build their own Portfolio of stocks & bonds. A mutual fund enables an investor to own a professionally managed portfolio with no or little knowledge of investing concepts.
In today’s Market, everyone knows that putting all of their eggs into one basket is not a wise decision. A mutual fund offers investors complete diversification in just one fund.
Mutual fund offers investors a convenience to invest in almost any segment according to the requirement & choice of investing. For example, Sectors funds make it possible for investors to buy into focused areas of market i.e. Pharma, Banking, IT etc.
One can easily invest & withdraw in any amount & choose to invest affordable calculated amounts systematically.
To protect the interest of investors, the rules & regulations are reviewed continuously from time to time by SEBI.
One can start with 2500 to get invested in mutual funds & get the benefits to an entire market of investable securities.
Types of Mutual Fund
Mutual Funds are basically of three types:-
As the name suggests, this sort of Funds invests the entire principal amount in stocks. These Funds are further differentiated according to the size of the companies i.e. Large, Mid & Small -Cap. Large Cap funds are those funds which invest a large portion of their corpus in companies with large Market Capitalization. These are old & well established companies with a good track record. On the rise- return measure, large cap funds deliver steady returns with relatively lower risk compared with mid & Small cap funds.
Another big group is Fixed-income category. These Mutual Funds focuses on investments to generate Interest income which then passes on to investors. They invest mainly in T-bills, Government securities, corporate bonds, many market instruments & other debt securities of different Time horizons.
Balanced Mutual Funds
As the name implies , Balanced funds are the type of funds that invest in both equity & debt at a balanced ratio thereby reducing investor’s risk. They carry Lower risks than pure equity funds.