Quick Answer: What Is Mutual Fund Category?

What is a mutual fund and its types?

A mutual fund is a basket of various investments, such as stocks, bonds, and cash.

There are three main types of mutual funds: equity funds, fixed-income funds, and money market funds.

Each of these types has a different risk level associated with it.

There are two main advantages to mutual funds..

What is mutual fund explain?

A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds.

What is the most aggressive mutual fund?

Top 10 Aggressive Mutual FundsFund NameCategory1Y ReturnsCanara Robeco Equity Debt Allocation FundHybrid13.8%Mirae Asset Hybrid – Equity FundHybrid10.1%BNP Paribas Substantial Equity Hybrid FundHybrid9.0%SBI Equity Hybrid FundHybrid3.5%12 more rows

Can a mutual fund go to zero?

In theory, a mutual fund could lose its entire value if all the investments in its portfolio dropped to zero, but such an event is unlikely. However, mutual funds can lose value, as each is designed to assume certain risk levels or target certain markets.

What is mutual fund and its benefits?

Mutual funds are the most popular investment choice in the U.S. Advantages for investors include advanced portfolio management, dividend reinvestment, risk reduction, convenience, and fair pricing. Disadvantages include high fees, tax inefficiency, poor trade execution, and the potential for management abuses.

What is category average in mutual fund?

The category average is a median (or the middle-most number) in a series of data. The idea is to show how your scheme has performed as against other schemes. It is natural to make this comparison because when you invest in MFs, it’s always a choice of one scheme over others.

What are the safest mutual funds?

Here are a few low-risk mutual funds for conservative investors to consider.Low-Risk Mutual Funds: Fidelity Income Conservative Bond Fund (FCONX) Source: Shutterstock. … Vanguard Equity Income Fund (VEIPX) … American Century Mid-Cap Value Fund (ACLAX) … Vanguard Total Stock Market Index Fund (VTSAX)

What is Blue Chip Fund?

A Blue chip fund is a term used to indicate well-established and financially sound companies. Blue chip funds invest in stocks of those companies that have a credible track record with sound financials along with regular dividend payments and profitability over the years.

What is mutual fund in simple words?

Definition: A mutual fund is a professionally-managed investment scheme, usually run by an asset management company that brings together a group of people and invests their money in stocks, bonds and other securities.

What are the 3 types of mutual funds?

Mutual funds are generally placed into one of four primary categories: equity, fixed income, money market, or hybrid (balanced). Equity funds are stocks or equivalents, while fixed income mutual funds are government treasuries or corporate bonds.

What type of entity is a mutual fund?

Mutual funds are not just a type of investment, but are actually legal entities, often formed as a business trust or corporation.

What are the 4 types of mutual funds?

There are four broad types of mutual funds: Equity (stocks), fixed-income (bonds), money market funds (short-term debt), or both stocks and bonds (balanced or hybrid funds).

Can I lose all my money in mutual fund?

There is no guarantee you will not lose money in mutual funds. In fact, in certain extreme circumstances you could end up losing all your investments. That’s why it is advisable to understand how mutual funds work. Mutual funds are managed by fund managers who invest in a wide variety of stocks, bonds and commodities.

Can you get rich from mutual funds?

Like any investment, the more you can afford to put in, the greater your potential returns. It is hard to get rich investing only $1,000 in any type of security. If you have a significant amount to invest, however, you can generate a sizable amount of income even with the most stable investments.

What is mutual fund example?

Mutual funds may include investments in stocks, bonds, options, futures, currencies, treasuries and money market securities. … Closed-End Mutual Funds: Closed-end mutual funds issue a fixed number of shares to the investing public and usually trade on the major exchanges just like corporate stocks.

Which type of mutual fund is best?

Best Mutual Funds in India for 2020Mirae Asset Large Cap Fund. Small Cap Funds. 5.7% 10.42% Invest.Axis Bluechip Fund. Mid Cap Funds. 9.48% 10.34% Invest.ICICI Prudential Bluechip Fund. Mid Cap Funds. 3.34% 7.82% Invest.SBI Bluechip Fund. MultiCap Funds. 2.61% 6.76% Invest.SBI Magnum Multicap Fund. Balanced Funds. 1.58% 7.78%

How do I compare money on Morningstar?

Once you enter your funds and click the “Show Comparison” button, you are presented with a snapshot of some key fund data. On the left it lists the funds, and you can then see a comparison of information such as the Morningstar star rating, category, YTD returns (with the S&P 500 as a benchmark), and expense ratios.

How safe are mutual funds?

In a nutshell, mutual funds are safe. Investors should not be worried about short-term fluctuations in the returns while investing in them. You should choose the right mutual fund, which is sync with your investment goal and invest with a long-term horizon.

How do I choose a mutual fund?

Top Tips for Picking a Winning Mutual FundStart With Your Goals and Risk Tolerance. … Pay Attention to the Expense Ratio—It Can Make or Break You! … Avoid Mutual Funds With High Turnover Ratios. … Look for an Experienced, Disciplined Management Team. … Find a Philosophy That Agrees With Your Own. … Buy No-Load Mutual Funds.More items…