Hello Bloggers, This blog is about Mutual fund, You will get to know what is Mutual Fund, what are the types, benefits and all. 

Before explaining this concept I will describe one scenario to understand this concept properly. Think that you are travelling from one place to other in a car. You have two options with you in order to reach the destination through car. one is self riding a car and another is choosing a driver to take a ride. Here self driving a car to reach destination is like investing in stocks because you yourself has to take decision like finding best route, speed of driving, where to stop and all whereas in second case is less risk and that is like mutual fund, because driver has to take all the decision you need not to worry, at the end you will reach the destination.

Let me give you simple definition for MUTUAL FUND, Where people invest funds to a organization which creates a pool of funds and reinvest the money in different investments like equity,  debt, etc., is called mutual fund.

Now the organizations get income out of investments that it has done it is either in the form of interest or dividend. It distributes the earned income to investors by holding some amount for themselves and it is called Management Expenses in standard form it is called “Expense Ratio”. Usually mutual funds will take 1 to 3 % of our investment as their management expenses.

Types of Mutual Fund

1. Equity Mutual Fund : In this form the organization take a pool of fund and invest completely into a stock market. this kind of mutual funds are at risk comparatively. 
2. Debt Mutual Fund : In this the investments goes to debt instruments like commercial paper, government bonds, T-bills etc., the risk level is low comparatively.
3. Hybrid Mutual Fund : Obviously the name itself says that this fund investment takes place in both equity and debt.
4. Solution Oriented Mutual Fund : This kind of mutual funds helps you in order to get some solution after some time frame for children education or for their marriage like that.
5. Index Mutual Fund : Investing fund based on some index like securities of company. The fund manager does not play a active role in this. 

Whatever may be the type of mutual fund, it has its own risk and policies, please go through the complete details of mutual fund before investing in it. hope I have shared some useful information how much that I have know. Thank You.