Mutual Funds may appear difficult or daunting to many individuals. We'll make an effort to make things as simple as possible for you. A mutual fund is essentially made up of the money that many different people (or investors) have pooled together. A qualified fund manager oversees the management of this fund.
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It is a trust that amasses funds from several participants who have similar financial goals. After that, it invests the funds in assets such as stocks, bonds, money market instruments, and/or other investments. Each investor is the owner of units, which are a fraction of the fund's holdings. By determining a scheme's "Net Asset Value, or NAV," the income or profits from this pooled investment are dispersed equally among the investors after certain costs have been deducted. Simply put, a mutual fund is one of the most practical investment options for the average person as it provides the chance to invest in a diversified, expertly managed basket of securities at a reasonably low cost.