Mutual Fund Investments- An Insight
Currently people are largely aware of Mutual Funds. Thanks to the "Mutual Fund Sahi Hai" campaign by AMFI. Even after this effort, people are averse to investment in Mutual Fund because of fear of loss of money. This is mainly because of lack of understanding on what & how mutual funds are and its working method. Many consider mutual funds as an indirect instrument to make investment in equities. So, people treat mutual funds in the same style as how they deal with investment in stocks. The above understanding is partially correct as mutual fund invest in stocks. However, when it comes to returns, it works differently. To make the understanding of mutual funds, let me explain it with help of one of the popular and oldest savings methods, which is chit funds. In a chit fund scheme, a fixed number of people called subscribers are grouped by an individual or an organisation and all these contribute an equal amount for a fixed period to create a sum. The money