Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, and other assets. These funds are managed by professional fund managers who make investment decisions on behalf of the investors.
Here are some key points about mutual funds:
Diversification: Mutual funds offer diversification by investing in a variety of securities. This helps spread the investment risk across different assets and reduces the impact of any individual security's performance on the overall portfolio.
Professional Management: Mutual funds are managed by experienced professionals who conduct research, monitor market trends, and make investment decisions. Investors benefit from the expertise of these fund managers.
Types of Mutual Funds: There are various types of mutual funds available, including equity funds (investing in stocks), bond funds (investing in bonds), money market funds (investing in short-term debt securities), index funds (tracking a specific market index), and sector-specific funds (investing in specific industries or sectors).
Risk and Return: Mutual funds come with different levels of risk and potential return. Equity funds generally carry higher risk but also have the potential for higher returns, while bond funds are generally considered less risky but offer lower potential returns. It's important to assess your risk tolerance and investment goals before choosing a mutual fund.
Net Asset Value (NAV): The value of a mutual fund is measured by its Net Asset Value, which represents the total value of the fund's assets minus its liabilities. The NAV is calculated at the end of each trading day and determines the price at which investors can buy or sell fund shares.
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Basics of MF 
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