Mutual Fund is a collective investment platform which may have multiple investment schemes with different characteristics and mandates. Based on the specific characteristics of each scheme, investor’s money would be invested under a pool system. This means, a particular scheme under mutual fund would have many investors holding the units of the specific Mutual Fund Scheme and not the stocks directly. The value of the scheme is called NAV(Net Asset Value) which is declared daily based on the market value of the stocks in that scheme on that particular day.
Selecting the right Mutual Fund Scheme/s from the large pool of available Mutual Schemes based on the financial profile of the investor, involves in-deapth understanding of both – the Scheme as well as the investor’s need & risk taking ability.