What is Mutual Fund?



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What is Mutual Fund.

4 Answer(s)


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Mutual fund is a vehicle by which even people who are not expert in stock market can participate in it with having low risk exposure compare to direct investing in share market

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A mutual fund is an entity that pools the money of many investors (its unit-holders) to invest in different securities. Investments may be in shares, debt securities, money market securities or a combination of these. Those securities are professionally managed on behalf of the unit-holders, and each investor holds a pro-rata share of the portfolio i.e. entitled to any profits when the securities are sold, but subject to any losses in value as well.

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Mutual fund is an investment programme funded by shareholders that trades in diversified holdings and is professionally managed.

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It takes the money of several investors and invests this in stocks, bonds, money market instruments and other types of securities.