Mutual Funds as a theme of investment has been growing continuously. A mutual fund is a pool of money from numerous investors who wish to save or make money. A mutual fund is considered as one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
A mutual fund usually spreads the money in companies across a wide spectrum of industries. This not only diversifies the risk, but also helps take advantage of the position it holds.
Mutual fund investments are professionally managed and provide a wide variety of schemes to investor based on their risk-return profile. All the mutual funds are registered with SEBI. They function within the provisions of strict regulation created to protect the interests of the investor.
Mutual funds are differentiated on the basis of their structure-open-ended and closed-ended. The difference between the two depends on the flexibility of sale and purchase of fund units.