Mutual Fund
Mutual fund is a financial instrument which pools the money of different people and invests them in stocks, bonds etc. Each investor in a mutual fund scheme owns units of the fund, which represents a portion of the holdings of the scheme. The securities are selected keeping in mind the investment objective of the scheme. Mutual funds are managed by asset management companies.
Major advantages of investing in mutual funds versus directly in stocks.
1. Risk diversification
2.Smaller capital outlay
3.Investment expertise
4. Economies of scale in transaction costs
5. Variety of products
6. Variety of modes of investments
7. Disciplined investing
