Mutual Funds

Mutual Funds: A mutual fund is a collective investment vehicle that pools money from multiple investors to invest in a diversified portfolio of securities such as stocks, bonds, money market instruments, or other assets. These funds are professionally managed by fund managers who allocate the pooled capital to generate returns for investors in proportion to their investment.

Key Features:

Pooling of Funds: Investors contribute money to a common pool, which is then invested in various financial instruments.

Diversification: Reduces risk by spreading investments across multiple securities and sectors.

Professional Management: Qualified fund managers handle investment decisions on behalf of investors.

Units and NAV: Investors receive units representing their share in the fund. The Net Asset Value (NAV) reflects the per-unit value of the fund’s assets after deducting liabilities. Example: If you invest ₹10,000 in an equity mutual fund with an NAV of ₹50, you receive 200 units. If the NAV later rises to ₹60, your investment becomes ₹12,000, resulting in a gain of ₹2,000