If you are one of those investors who fears investing considering losses or one of those who’d love to invest but can only do so much with that small budget. Then Mutual funds are your calling.
Mutual funds are professionally–managed trusts or investment vehicles that pool funds from various small-time investors. The investors in a mutual fund have a common financial goal & their funds are invested into various asset classes (stocks, bonds, short-term money market instruments and commodities such as precious metals) in accordance with the fund’s investment objective.
The funds are generally well diversified to offset potential losses. They offer an attractive way for savings to be managed in a passive manner without paying high fees or requiring constant attention from individual investors. Mutual funds present an option for investors who lack the time or knowledge to make traditional and complex investment decisions. By putting your money in a mutual fund, you permit the portfolio manager to make those essential decisions for you.
While there maybe various benefit when investing in MF, there are unsaid risks too. The benefits may range from liquidity, flexibility, low transaction costs, transparency & more.
As for risks, you may have quite often heard – Mutual Funds are subject to markets risks, please read the offer document carefully before investing.
Mutual Funds are categorically divided on basis of maturity period & investment objectives. While MFs depending on maturity period may range from open-ended funds, to close-ended funds and to interval funds, MFs depending on investment objectives can be broadly classified into the following: