What is a mutual fund?

A mutual fund pools money from many investors and invests it in a basket of stocks, bonds or other assets, managed by a professional fund manager.

When you invest, you get units, and the value of each unit is called the NAV (Net Asset Value). Mutual funds let small investors get diversification and professional management with small amounts.

Main types include equity funds (stocks, higher risk and return), debt funds (bonds, lower risk), hybrid funds (a mix) and index funds (which simply track a market index). All mutual funds in India are regulated by SEBI. Read the scheme documents before investing.