A mutual fund is a type of investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Managed by professional fund managers, mutual funds offer individuals an opportunity to invest in a wide range of assets without requiring extensive market knowledge.
Mutual funds are designed to cater to various financial goals, whether it's wealth creation, retirement planning, or earning regular income. They are categorized into different types such as equity funds, debt funds, hybrid funds, and index funds, each offering varying levels of risk and return. Investors can choose funds based on their risk tolerance, investment horizon, and financial objectives.
One of the key benefits of mutual funds is diversification, which helps reduce risk by spreading investments across multiple assets. Additionally, mutual funds provide liquidity, allowing investors to buy or sell units easily. With professional management, transparency, and flexibility, mutual funds are an ideal choice for both beginners and experienced investors looking to grow their wealth over time.