Mutual Funds, Overview of Mutual Funds

Mutual Funds

Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities such as stocks, bonds, money market instruments, and other assets.

Overview of Mutual Funds:
Structure:

Mutual funds are managed by professional fund managers or management companies, who make investment decisions on behalf of the investors. They charge a fee for their services, known as the expense ratio.

Types of Mutual Funds:

i. Equity Funds: Invest primarily in stocks or equities. They are suitable for investors seeking long-term capital appreciation.

ii. Debt Funds: Invest in fixed-income securities such as bonds and treasury bills. These investments are ideal for individuals aiming for consistent earnings and safeguarding their capital.

iii. Hybrid or Balanced Funds: Invest in a mix of stocks and bonds to provide a balance of growth and income.

iv. Money Market Funds: Invest in short-term, low-risk securities such as treasury bills and commercial paper. They are suitable for investors seeking liquidity and capital preservation.

v. Sector Funds: Focus on specific sectors or industries such as technology, healthcare, or energy.