Understanding Mutual Funds
A comprehensive guide to how mutual funds work
What Are Mutual Funds?
A mutual fund is a type of investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. Managed by professional portfolio managers, mutual funds offer individual investors access to diversified, professionally managed portfolios at a relatively low cost.
"Mutual funds provide diversification and professional management that would be difficult for most individual investors to achieve on their own." — Gromi Finance Experts
How Mutual Funds Work
Pooling Money
Investors purchase shares of the mutual fund, pooling their money together to create a large investment fund.
Professional Management
Fund managers use the pooled money to buy a diversified portfolio of securities based on the fund's objectives.
Share Value
The value of each share (NAV) is calculated daily based on the total value of the fund's assets minus liabilities.
Returns
Investors earn returns through dividends, interest payments, and capital gains when securities are sold at a profit.
Types of Mutual Funds
Equity Funds
Invest primarily in stocks for long-term capital growth.
Fixed Income Funds
Invest in bonds and other debt securities for regular income.
Balanced Funds
Mix of stocks and bonds to balance risk and return.
Index Funds
Track a specific market index with lower fees.
Benefits of Investing Through Gromi Finance
- Diversification: Spread risk across many securities
- Professional Management: Expert fund managers make investment decisions
- Liquidity: Easily buy or sell fund shares
- Affordability: Access to diversified portfolios with small investments
- Convenience: Gromi Finance makes investing simple and accessible
Ready to Start Investing?
Gromi Finance makes mutual fund investing simple and accessible for everyone.
Explore Gromi Finance Mutual FundsMutual fund investments are subject to market risks. Please read all scheme related documents carefully before investing. Past performance is not indicative of future returns.
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