What is a Mutual Fund?
A mutual fund is a professionally managed investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds or other securities. In India, mutual funds are regulated by SEBI under the SEBI (Mutual Funds) Regulations, 1996.
How Does NAV Work?
NAV (Net Asset Value) is the per-unit market value of a scheme, calculated daily as: (Total Assets – Liabilities) ÷ Units Outstanding. AMFI publishes NAV for all schemes by 11 PM every business day.
Types of Mutual Funds
Equity Funds
Invest primarily in stocks. Suitable for 5+ year horizon. Sub-types: Large Cap, Mid Cap, Small Cap, Flexi Cap, ELSS, Index, Sectoral.
Debt Funds
Invest in fixed-income securities. Lower risk. Sub-types: Liquid, Overnight, Short Duration, Medium Duration, Long Duration, Gilt, Credit Risk.
Hybrid Funds
Mix of equity and debt. Sub-types: Conservative Hybrid, Balanced Hybrid, Aggressive Hybrid, Dynamic Asset Allocation (BAF).
Key Benefits
- Professional management by expert fund managers
- Diversification across 50–100 securities
- High liquidity — redeem most funds any business day
- Tax efficiency — ELSS saves ₹1.5L under Section 80C
- Start small — SIP from ₹500/month
How to Start
- Complete KYC (PAN + Aadhaar + bank account)
- Choose a fund matching your goal, risk appetite and horizon
- Invest via AMC website (Direct Plan) or a SEBI-registered distributor
- Monitor annually — not daily