What are mutual fund ?
Mutual funds us a special kind of investment through which you can invest on different types together.
You can do a diversifies mutual investment by investing at one place. Asst management company starts mutual funds. Basically you give your money to asset management company and many people like you do so.
That company invest all the money collectively at different places. Out of some small percent of 1–2% is kept as a profit by asset compyand rest you get back as per that return rate.
HDFC, HSBC, ICICI, Aditya Birla, Reliance, Tata, these are the few examples of companies and bank who started their own assest management company. All the companies starts different kinds of mutual funds in large numbers.
For example ICICI has started more than 1200 mutual funds. So how risky is you mutual funds and what is the return depends on the mutual funds that you are investing in.
Mutual funds can give the return rate of 4% and also of more than 30% too. It can be of zero risk and also if high risk to. Because all this depends on where the asset management cimyis investing your Money.
If that company is investing on stocks then it will be more risky and you will get more returns. And if it’s investing in government bonds then it will be less risky.
Types of mutual funds.
Different types of mutual funds depends on the basis of investment done by AMC people.
We can divide this in the 3 categories: Equity mutual funds, debt mutual funds and hybrid mutual funds.
If you don't have more knowledge about mutual fund then Don't invest.
I have given knowledge about the mutual fund in simple words