A mutual fund is an investment vehicle that pools money from multiple investors and invests it in a portfolio of securities such as equity shares, bonds, money-market instruments or other permitted assets, in accordance with the investment objective of the particular scheme.
Mutual fund schemes are managed by professional fund managers on behalf of investors.
Investors participate in a mutual fund scheme by purchasing units, and the value of their investment varies based on the Net Asset Value (NAV) of those units.
When an investor invests in a mutual fund scheme, units are allotted based on the applicable NAV, subject to applicable rules and charges.
The pooled money is invested by the scheme according to its stated investment objective and investment strategy.
The value of the underlying investments may increase or decrease depending on market conditions and other applicable risks, which in turn affects the NAV of the scheme.
Depending on the type of scheme and option selected, investors may realise gains or losses when units are redeemed. Applicable taxation depends on prevailing tax laws and the investor's circumstances.
Mutual fund schemes are managed by professional fund managers who make investment decisions in accordance with the scheme's stated investment objective and mandate.
Mutual funds can provide exposure to a range of securities through a single scheme.
Diversification may help reduce concentration risk, but it does not eliminate market risk or guarantee against losses.
Many mutual fund schemes allow investors to begin with relatively small amounts, subject to the minimum investment requirements specified by the respective scheme.
Facilities such as Systematic Investment Plans (SIPs) also enable investors to invest periodically.
Mutual funds offer different categories of schemes across equity, debt, hybrid and other permitted asset classes, with different investment objectives and risk levels.
Investors should understand the scheme's objective, investment horizon and associated risks before investing.
Mutual funds provide investors with information such as NAVs, portfolio disclosures, scheme documents, expense ratios and risk-related disclosures in accordance with applicable regulatory requirements.
Mutual funds provide access to professionally managed investment portfolios without requiring investors to directly select and manage individual securities.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Mutual Fund schemes do not assure or guarantee returns. Past performance may or may not be sustained in the future. Investors should consider their risk profile, investment requirements and investment horizon before investing.
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