Mutual Funds
Mutual funds: A pool of money managed by professionals that invest in stocks, bonds, and other assets. You invest alongside others, benefitting from diversification and expertise. Ideal for growing wealth without needing a large sum or market research.
Types of Mutual Funds:
Equity Funds: These funds invest primarily in stocks of companies. Equity funds can offer high returns, but they are also considered to be more risky than other types of mutual funds.
Debt Funds: These funds invest in fixed-income securities such as government bonds, corporate bonds, and certificates of deposit. Debt funds generally offer lower returns than equity funds, but they are also considered to be less risky.
Liquid Funds: These funds invest in very short-term debt instruments with maturities of less than 91 days. Liquid funds are designed to provide investors with easy access to their money.
Hybrid Funds: These funds invest in a combination of stocks, bonds, and other assets. Hybrid funds can offer a balance of risk and return.
Index Funds: These funds track the performance of a particular market index, such as the S&P 500 or the Nifty 50. Index funds typically have lower fees than actively managed mutual funds.
Sector Funds: These funds invest in companies in a particular sector of the economy, such as technology, healthcare, or financials. Sector funds can be more volatile than diversified funds.