Mutual funds are an ideal choice for most investors. They are simple to use and offer a number of advantages

Mutual funds combine the savings of a large number of investors and manage it as a single pool of money. Instead of investors worrying about which stock or bond or commodity to invest in, professional fund managers do the job.

Simply put, mutual fund is a financial intermediary, set up with an objective to professionally manage the money pooled from investors at large. By pooling money together in a mutual fund, investors can enjoy economies of scale.

For the individual investor who does not have much time to study and research investments himself, mutual funds are one of the best option for reaping the benefits of different types of investments with minimum effort and at a lower cost. In most funds, it is possible to start investing with as little as a thousand rupees or even less. Also, unlike many other investments, mutual fund investments are highly ‘liquid’. ‘Liquid’ means an investment can generally be withdrawn without much delay. When an investor wants to withdraw money from a mutual fund, it is generally possible to do so at short notice and receive the redemption proceeds within a few business days.