Mutual funds a general overview
A mutual fund is a professionally managed fund s that pools money from many investors to purchase securities . Mutual funds provide Asset diversification Diversification involves the different sector of investments within a portfolio and is used to manage risk. diversification: A fund diversifies holding many securities; this diversification decreases risk. By purchasing mutual funds, you are provided with the immediate advantages of instant diversification and asset allocation without the large amounts of cash needed to create individual portfolios.The professional fund manager select fund based on company profile & market condition for capital appreciation. Types of fund based on nature: 1. Closed-end fund : A closed-end fund ( CEF ) or closed-ended fund is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund 2 . OPEN END FUND: Open-end fund (or open-ended fund ) is a collective in