What is Mutual Fund ?

There are various form of investment avenues. Mutual fund is of one kind.

Mutual Funds is, one kind of investment channel, where Mutual Funds Companies (AMC) collect money from various investors invest it in various form of investments, like equities, bonds, debt securities, etc.

Asset Management Company has various schemes. Each Scheme is managed by a professional person called Fund Manager.

Each and every scheme has different characteristics. In one of scheme fund manager only invest in shares of large cap companies. In some scheme he may invest in small cap companies, debts securities, bonds etc or combinations of Equity and Debts.

Equity Funds are very popular type of mutual fund, where investors money is invested only in shares of various companies.

If you want to invest in Mutual Fund, you can either invest in lumpsum or through Systematic Investment Plan (SIP), where specific amount debited every month on specific date and get invested in scheme of Mutual Fund selected by investor.

Systematic Investment Plan (SIP) is most popular. You can start with as low as Rs. 100 per month.

In India, mutual funds are registered with SEBI. AMCs has to follow guidelines and regulation created by SEBI. Hence AMC can not misuse investors money.