Mutual Fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in them in various kinds of assets to generate returns.
In other words instead of you investing your money directly, it is being invested by professional fund managers. By investing in mutual funds, the investor is handing his money over to a mutual fund manager, giving him or her full discretion in trading the asset as he or she sees fit. On the other hand if a person wants to allocate his money by his own wishes then he can look for other financial products like ETFs (Exchange traded funds) which are similar to mutual funds. Investing in mutual funds helps in diversifying your portfolio.
The pool of money collected is managed by the asset management company (AMC). There are various AMCs in India like Reliance MF, ICICI Prudential MF, Birla Sunlife MF, Axis MF etc. An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.
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