Mutual Funds

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To many people, Mutual Funds can seem complicated or intimidating. We are going to try and simplify it for you at its very basic level. Essentially, the money pooled in by a large number of people (or investors) is what makes up a Mutual Fund. This fund is managed by a professional fund manager. 

It is a trust that collects money from a number of investors who share a common investment objective. Then, it invests the money in equities, bonds, money market instruments and/or other securities.  

Each investor owns units, which represent a portion of the holdings of the fund. The income/gains generated from this collective investment is distributed proportionately amongst the investors. 

The best part about mutual funds is that it allows investors to invest with small amounts even on monthly basis (SIP's) as per their risk category, Comfort & Future goals in different categories giving them an option of diversification. It is very important to realise that savings should start as early as possible when the liabilities are less.