Mutual Fund typically pool money of different investors and re-invest it into stocks, bonds and securities.

They’re a great option for those of us who find trading in the stock market difficult due to lack of knowledge or apprehension in investing into shares. The money collected in a fund is invested by individuals we call ‘Fund managers’. These Fund Managers have great financial investment expertise and keep track of the stock market.

Types of MF:

Open End Mutual Fund

• It is said to be Open at the time for Entry and Exit
• Meaning, invest anytime and get out anytime.

 

Close End Mutual Fund

• Specified entry time and exit time
• It has 3 durations – Large, Mid and Small Cap

 

Large Cap Mutual Funds

• Relates to investing in large cap companies with a long term record.
• They have less risk involved.

 

Mid Cap Mutual Funds

• Investing in middle sized companies.
• Risks involved but also more returns estimated as middle sized companies have potential to grow

 

Small Cap Mutual Funds

• Investing in small companies
• High risk involved with average return possibility

 

Equity Mutual Funds

It is when a company invests majority of its money into its own shares (equity).

 

Debt Mutual Fund

When a company invests into Government bonds, company bonds etc.

 

Balanced Mutual Fund

One where a company invests in both Equity and Debt equally or as per a ratio.