Mutual Fund
What is Mutual Fund ?
For first timers, mutual funds may sound complex, but in reality mutual funds are anything but intimidating. Mutual funds are in fact for the benefit of those who want to take the advantage of investing across equity, debt, gold, etc, but may not have the skill set, time or financial wherewithal to do so.
This is exactly where a mutual fund comes in as it is a professionally managed collective investment vehicle that lets you invest in small amounts and reap big benefits, so long as you choose the right schemes in line with the goals you have set for yourself.
Mutual funds also provide you multiple advantages of flexibility, liquidity, tax benefits and diversification of risk at a very small price.
Mutual funds are usually "open ended", meaning that new investors can join into the fund at any time. When this happens, new units, which are like shares, are given to the new investors.
Advantages of investing in mutual funds:
- Increased diversification
- Daily liquidity
- Professional investment management
- Service and convenience
- Government oversight
- Transparency and ease of comparison
Disadvantages of investing in mutual funds:
- Subject to mutual fund fees and expenses
- Less control over timing of recognition of capital gains
- Less predictable income
- No opportunity to customize
Types of Mutual Fund
Equity Fund
Debt Fund
Liquid Fund
Balanced Fund
Exchange Trade Fund
Fund of Fund
Gold ETF
