Mutual Fund

Benefits of Mutual Funds Investment -

• Professional Management -

  The fund managers do the research for you. They select the securities and monitor the performance

• Diversification or “Don’t put all your eggs in one basket -

  Mutual funds typically invest in a range of companies and industries. This helps to lower your risk if one company fails.

• Affordability -

  Most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases.

• Liquidity -

  Mutual fund investors can easily redeem their shares at any time, for the current net asset value (NAV) plus any redemption fees.
  Mainly the Mutual Funds have four major categories; target dates funds, stock funds, money market funds, & bond funds, and all of these four types has own risks, features, and rewards.

• Money market funds -

  have relatively low risks. By law, they can invest only in certain high-quality, short-term investments issued by U.S. corporations, and federal, state and local governments.

• Bond funds -

  The bond funds have the diverse types and these different types of bond has own risk and most in the market but the most rewards funds too.

• Stock funds invest in corporate stocks. Not all stock funds are the same. Some examples are -
  • Growth funds focus on stocks that may not pay a regular dividend but have potential for above-average financial gains.
  • Income funds invest in stocks that pay regular dividends.
  • Index funds track a particular market index such as the Standard & Poor’s 500 Index.
  • Sector funds specialize in a particular industry segment.
• Target date funds - hold a mix of stocks, bonds, and other investments. Over time, the mix gradually shifts according to the fund’s strategy. Target date funds, sometimes known as lifecycle funds, are designed for individuals with particular retirement dates in mind.