Mutual Funds

Investors provide their money to a mutual fund, the fund manager pools this money together and invests it in securities on the investors' behalf, and the returns earned are then passed back to the investors in proportion to their holding.

Concept of mutual fund

A mutual fund is a pooling of money collected from many investors for the purpose of investing in shares, bonds, ventures, or other securities. It is a trust managed by an investment expert (the fund manager) who invests the pooled money on behalf of the investors. The biggest advantage of investing through a mutual fund is that it gives small investors access to professionally managed, diversified portfolios of shares, bonds, and other securities, which would be quite difficult to create with a small amount of capital.

Advantages of mutual fund

The mutual fund provides benefits to small investors, so its popularity gradually increases. The main advantages are: