What is Mutual Fund?
A mutual fund pools money from many investors and invests it in a diversified portfolio of stocks, bonds, or other securities, managed by a professional fund manager. Investors own units of the fund proportional to their contribution.
Mutual funds are regulated by SEBI and categorised by asset class (equity, debt, hybrid) and market-cap focus (large-cap, mid-cap, small-cap, multi-cap). They can be bought as a lump sum or via SIP.
Returns are not guaranteed and depend entirely on how the underlying securities perform — unlike a bank FD, the principal itself is subject to market risk.
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