What is a mutual fund?

A mutual fund is a pooled investment vehicle where money from multiple investors is collected and invested in a diversified portfolio of assets such as stocks, bonds, or other securities. Professional fund managers handle the investment decisions based on the fund’s objectives, aiming to generate returns while managing risks. Mutual funds offer diversification, liquidity, and professional management, making them suitable for both new and experienced investors. Investors receive units representing their share in the fund, and the value of these units changes with the performance of the underlying assets. Mutual funds can be open-ended, allowing continuous buying and selling of units, or close-ended, with a fixed maturity period. They are regulated by authorities to ensure transparency and protect investors’ interests.