A mutual fund is a pecuniary tool consisting of a pool of money collected from different investors to invest in securities like stocks, bonds, etc. Mutual funds are handled by professional portfolio managers, who allot the funds and manage them carefully to generate wealth for the fund’s investors to attain the investment objectives. The mutual fund market is regulated by the Securities Exchange Board of India to ensure responsible and transparent management of the investor’s wealth.

Mutual funds are mainly divided into categories based on:

A mutual fund is essentially a trust that gathers capital from investors with similar investment goals. Based on the fund’s objective, the money collected from investors is placed in various avenues such as stocks, gold, bonds and other securities. A fund manager oversees each fund and ensures optimum returns on the money invested. The income generated by the fund is divided and distributed among the investors proportionately.