A mutual fund is a type of financial intermediary that pools the funds of investors who seek the same general investment objective and invests there in a number of different types of financial claims (e.g., equity shares, bonds, money market instruments). Mutual Funds can be a higher risk investment but the returns are generally greater than in any other investment plan. Mutual Funds have both advantages and disadvantages. The advantages of investing include professional management, low risk, diversification, liquidity, economies of scale. A mutual fund aims to create a more diversified portfolio than the average investor could on their own. Mutual funds have professional fund managers buy securities for you. Money market funds: these funds invest in short-term fixed income securities such as government bonds, treasury bills, bankers’ acceptances, commercial paper and certificates of deposit.

Jincy Anna Joy

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