© Kendrysdale, Megapixl.com

Investment in equity or any other market is susceptible to many risks due to the volatility of the instruments listed on the market. This movement in the asset price normally hurts novices as they tend to sell during a price fall. 

However, veterans gain from the movement as they get more bang for their buck during the fall in their favourite asset. Even veterans face some setbacks as sometimes they lack time and effort to track their investments.  

These market characteristics even act as a hurdle for newbies looking for investment opportunities. However, there's an instrument available in the market that favours such investors by providing professionally managed services that may bring down the risks associated with the investment.  

Mutual funds are professionally managed pools of money overseen by expert fund managers who deploy the money collected from investors with a common investment goal. This corpus is then invested in assets like listed company shares, government bonds, corporate bonds, money market instruments, and/or other securities as per the funds’ mandate.  

Mutual funds offer several merits, making them extremely popular among investors. Some of the major advantages are as follows: 

Diversification of investment 

(Source: 8vfand | Megapixl.com) 

As mentioned above, mutual funds diversify by investing in various options available in different sectors and markets. They follow a predefined strategy in line with the scheme’s stated objective. The funds’ advisors track and do extensive research to pick the best instrument for balancing out volatility while aiming for a decent rate of return.  

However, this return is not guaranteed, but their immense experience combined with access to sophisticated tools and knowledge comes in handy to wade through the market.

Professionally managed  

Mutual funds are managed by experienced fund managers with immense financial experience to gauge the merit of different investments. Based on this professional understanding, fund managers deploy the funds in select handpicked assets. 

Range of mutual funds for different requirements  

One factor that adds to the charm of mutual funds is the immense options available in mutual fund markets. Many of mutual fund schemes are available in the market with different objectives and strategies.  

Policies vary based on the risk appetite, investment goal, type of market, and other factors.   

With this being said, they all share a common goal of growing investors’ wealth. 

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