Investment in mutual funds

We have all heard about mutual funds some or the other time. we were either taught about it in our economic class, got call from a bank’s call centre to invest in them, read about it in the newspaper and some magazines, heard it as a radio jingle or watched it on TV with the usual “Mutual funds are subject to market risks…”.  But what exactly are these funds that people keep talking about? Are there any other funds that are available to the business to invest in? let’s find out today.

First of all, mutual funds are no second to assets. How much money you invest in the mutual fund depends completely on you. It is like a pool of money from many investors (small to big sized) which is invested in some fluctuating market players like shares, bonds and securities, money market instruments and so on. This is not just a single fund in itself. There are seven different types of mutual funds too which are available. 

Long short fund is also one of the rest. Others include equity funds, money market funds, fixed income funds, index funds, balanced funds, and speciality funds.

For businesses, there are ESG funds, that a business invests into, for better functioning of their staff, establish strong relations with the buyers and suppliers, and also to ascertain investors or potential investors that every transaction that is being carried out in the business is only through ethical means.

In the long run, funds become a huge asset for any individual or a company that owns a business. Although their value hugely depends on the status of the market. For example, due to COVID-19, most businesses are seeing their shares to be down, as a result, the current valuation of mutual funds isn’t that great a picture. But eventually, when markets start to rise, this picture will slowly change and show benefits too.