Mutual Fund Basics for Beginners

A mutual fund is a pool of money collected from many investors to invest in a diversified portfolio of stocks, bonds, or other securities. It's managed by a professional fund manager.

Why Invest in Mutual Funds?

• Diversification: With a single investment, you get exposure to dozens or even hundreds of securities, reducing your risk.
• Professional Management: An expert fund manager makes the decisions on where to invest the fund's money.
• Accessibility: You can start investing with a small amount, often as little as ₹500 through a Systematic Investment Plan (SIP).

Types of Mutual Funds

Funds are primarily categorized by the asset class they invest in: Equity Funds (stocks), Debt Funds (bonds), and Hybrid Funds (a mix of both). Your choice depends on your financial goals and risk tolerance.