A mutual fund is a professionally
managed type of collective
investment scheme that pools
money from many investors to buy
stocks, bonds, short-term money
market instruments, and/or other
Concept of Mutual funds
A Mutual Fund is a trust that pools the savings of a number
of investors who share a common financial goal.
The income earned through these investments and the
capital appreciation realized are shared by its unit holders in
proportion to the number of units owned by them.
Thus a Mutual Fund is the most suitable investment for the
common man as it offers an opportunity to invest in
diversified professionally managed basket of securities at a
relatively low cost.
TYPES OF MUTUAL FUNDs
Subscription and repurchase on continuous
Does not have fixed maturity period
Stipulated maturity period
• To provide capital appreciation over the medium to long-
• High risk
• Regular and steady income to investors.
• Bonds, corporate debentures, Government securities and
money market instruments.
• Provide both growth and regular income
• Equities and fixed income securities
• To provide easy liquidity, preservation of capital and
• Treasury bills, commercial paper and government
• In government securities.
• No default risk.
• Rise or fall in accordance with the rise or fall in the