Mutual Funds

What Is Mutual Fund?

A Mutual Fund is an investment product that pools money from a group of investors and invest in targeted asset class with certain investment objective. An investor of a Mutual Fund becomes the stakeholder of the underlying assets and the income generated from these underlying holdings are distributed amongst the investors proportionately. Mutual Funds can be an ideal investment choice, given their ease of use and advantages.

Advantages of investing in Mutual Funds
1. Professional Management
2. Risk Diversification
3. Affordability & Convenience (Invest Small Amounts)
4. Liquidity
5. Low Cost
6. Well-Regulated
7. Tax Benefits

Mutual Fund Scheme classification:-
Mutual funds come in many varieties, designed to meet different investor goals. Mutual funds can be broadly classified based on –

1. Organization Structure – Open ended, Close ended, Interval
2. Management of Portfolio – Actively or Passively
3. Investment Objective – Growth, Income, Liquidity
4. Underlying Portfolio – Equity, Debt, Hybrid, Money market instruments, Multi Asset
5. Thematic / solution oriented – Tax saving, Retirement benefit, Child welfare, Arbitrage
6. Exchange Traded Funds
7. Overseas funds
8. Fund of funds