Mutual funds represent a popular investment vehicle, pooling money from numerous investors to purchase a diversified portfolio of stocks, bonds, and other...
A mutual fund pools money from many investors to buy a diversified portfolio of stocks, bonds, or other securities, professionally managed by a fund manager.
Main types include equity funds (stocks), debt funds (bonds), hybrid funds (stocks and bonds), and money market funds (short-term securities).
Investors earn through capital appreciation of the fund's holdings, dividends, and interest income generated by the underlying investments.
Mutual funds are subject to market risks, meaning their value can fluctuate. While diversification reduces risk, they are not risk-free and do not guarantee returns.