What is a mutual fund?
A mutual fund collects money from many investors and invests it in securities according to a stated objective. Each investor holds units that represent a share of the fund’s portfolio.
Units and NAV
The Net Asset Value (NAV) is the per-unit value of the scheme. It is calculated from the value of the underlying holdings and changes as markets move. When you invest, you receive units at the applicable NAV.
Main categories
- Equity funds invest mainly in shares and can be volatile.
- Debt funds invest in bonds and money-market instruments and carry credit and interest-rate risk.
- Hybrid funds mix asset classes.
- Index funds aim to track a market index.
Things to consider
- Your goal and time horizon
- The scheme’s objective and risk level
- Costs, such as expense ratio and exit load
- Tax treatment
Read more on our Mutual Funds page, where you can also try the educational SIP calculator.
Want to talk this through?Our team can answer your questions in a no-pressure conversation.
Book a free call
