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
Simplicity :-
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.
Diversification :-
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.
Convenience :-
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.
Flexibity :-
One can easily invest & withdraw in any amount & choose to invest affordable calculated amounts systematically.
Regulated :-
To protect the interest of investors, the rules & regulations are reviewed continuously from time to time by SEBI.
Accessibilty :-
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:-
Equity
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.
Debt 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.