| Mutual Fund is an easier and more professional | | | | differentiated on the basis of their investment |
| way of tapping the stock markets. It is | | | | style, E.g. Diversified equity funds invest in equities |
| particularly suited to people with investable fund | | | | across all the sectors whereas Sectoral funds |
| but not adequate expertise or time to create and | | | | invest only in equities related to that particular |
| manage their own equity portfolio. A mutual fund | | | | sector viz. Power sector funds invest only in |
| house is an institute which collects money from | | | | companies dealing in power sector, whereas |
| several investors and then invests such money in | | | | Infrastructure fund invest in Infrastructure |
| equities, bonds or other financial instruments. A | | | | companies. Apart from this, there are funds which |
| mutual fund is under the supervision of Fund | | | | only invest in bonds and/or Govt. securities and |
| Manager who takes the investment decisions. | | | | thus generate more steady income stream. |
| Mutual funds can be segregated into various | | | | Main advantage of a Mutual Fund is that it |
| categories based on different criterions. E.g. A | | | | provides professional expertise to masses in lieu |
| mutual fund can be either Open ended or close | | | | of small fee. A fund is managed by a |
| ended, An open ended mutual fund is that fund | | | | professionally qualified Fund Manager, who is in a |
| which allows its participants to withdraw their | | | | better position to understand markets than a |
| funds as and when they want, whereas a close | | | | common individual investor. Thus, Mutual fund is a |
| ended fund has a lock-in period and allow its | | | | more secure way of availing the benefits of |
| investor to withdraw their funds only after the | | | | Equity market without incurring the risks of direct |
| expiry of such period. | | | | investment. |
| Other than this, mutual funds can be | | | | |