Investing & funds
What is Mutual fund?
Hinglish mein padhein: Mutual fund kya hota hai?
A mutual fund pools money from many investors and invests it in stocks, bonds or both, managed by a SEBI-registered asset management company.
Each investor owns units whose value — the NAV — moves with the fund's holdings. Funds charge an annual expense ratio.
Direct plans have lower expenses than regular plans because no distributor commission is paid.
Related terms
- NAV (Net asset value)NAV is the per-unit value of a mutual fund: total assets minus liabilities, divided by units outstanding. It is calculated once each business day.
- SIP (Systematic investment plan)A SIP invests a fixed amount in a mutual fund at regular intervals, usually monthly, automatically from your bank account.
- Expense ratioThe expense ratio is the yearly fee a mutual fund charges, expressed as a percentage of your investment and deducted from the NAV.
- Index fund and ETFIndex funds and ETFs simply copy an index like the Nifty 50 instead of picking stocks. ETFs trade on the exchange like shares.