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Mutual Fund Overview: Definition, Types, Investment and SIP

What is Mutual Fund :

Mutual funds is the best solution to raise our capital or income. A lot Of experts are more likely to invest in MF. Mutual funds are considered as common funds or pools of money, that are invested in securities or Assets by investors through the fund manager. In these investments, the fund manager manages the total money of shareholders.

The fund manager is the key holder to investing our money in securities. Mostly, a lot of investors and businessmen are enthusiastic to invest in mutual funds most likely as they are managed by experienced fund managers.

Mutual funds

Mutual funds are managed globally and also in most countries such as  INDIA, CANADA, the USA, and regionally. These are one-time lump sums investments and it mainly based on index funds stock exchanges.

Mostly, investing platforms are likely to be risky as they choose stocks to invest in,  or crypto investing, this is why mutual funds are considered risky. The value of mutual funds changes when shareholders sell or buy assets the portfolio goes bearish or bullish this particular reason makes Profits or Losses unpredictable in mutual funds.

Why Should We Invest in Mutual Fund :

Professionally managed :

To invest in financial markets, we need to know some major skills to invest in markets with the required analysis, and also the management of time is much more important. Most people cannot put much time and effort into the financial market. For that, we need some experts usually known as fund managers. Once you invest in mutual funds through a funds manager, they invest in different securities with professional skills.


Diversification means, investing and buying several securities and assets in companies in the stock market. Investing in a single company leads to a lot of losses. Whereas, diversification is the best solution for greater profits.

Best and Top Mutual Funds For Investing in 2023 to Gain Profits :

  • ICICI prudential technology funds
  • Tata digital fund’s Direct Growth
  • Quant tax plan growth
  • Quant Small Cap Fund Direct Plan Growth
  • Aditya Birla Sun Life Digital India Fund Direct Growth
  • SBI Technology Opportunities Direct Plan
  • Quant Mid-Cap Funds
  • Axis Small Cap Fund Direct Growth

These are the best mutual funds to invest in 2023 with the high, and most profitable returns within  3 and 5 years.

Types of Mutual Funds :

  • Stock funds
  • Money market funds
  • Bond fund
  • SIP
  • Target date funds
  • Balanced funds
  • Debt funds

Stock Funds:

Stock funds are equity funds in which investors buy assets with pools of money through banks or digitally through the fund managers. The assets or securities are run with equity. Stock funds are unpredictable when stocks are irregular. Based on company volatility, the gains, and losses are determined.

Money Market Funds:

As we all know, money market funds are also named low volatility with unsteady funds. In these funds, buy assets for short-term investment only. However, these are low-risk and profitable.

Bond Fund:

A bond fund is similar to a mutual stock fund. Bond funds have less risk compared to money market funds due to credit risk, and interest rate risk. But best for profits due to a diversified portfolio at best held in fixed-income securities.

SIP(Systematic Investment Plan):

SIP is a simple investment that allows you to buy assets at lower prices. The sip’s price began at a range of 100,500,1000,5000 rs. And also we can invest a bulk amount at the same time. These are lower risk and minimum profitable growth.

Target Date Funds:

Target date funds are future-aimed investments. Because investors invest money to purchase assets, and securities like a term plan for up to 5 years. The term plan is also changed to 5,10 years. They get some interest for investment, and these are used in the future after the retirement process.

Balanced Funds:

Balanced funds are a type of hybrid funds. In these funds, the stock equity component, bond component, and money market component are combined and work together like a simple portfolio. By the mixed components, profit and loss should be balanced.

So, balanced funds work for short or mid-term investors. In this fund, the investors have a certain mixture of safety and the rise of capital in investment.

Some best-balanced funds investment:

  • Sundaram equity hybrid funds
  • HDFC balanced advantage fund
  • ICICI prudential multi-asset fund
  • SBI dynamic asset allocation fund
  • BOI AXA equity debt rebalance the fund

Debt Funds :

The debt funds primarily apply to the government or corporate bonds as well as money market instruments. Due to fixed-income instruments, both government and corporate bonds sell or buy margin price ranges. In debt funds, the investment of securities or assets has an interest rate of up to 10% like fixed deposits in banks. The interest rate gradually increases when stock markets increase.

Top Most Performing Debt Mutual Funds

  • UTI bond fund
  • Aditya birla sun life medium term fund
  • ICICI prudential short-term fund
  • Nippon India income fund

Mutual Fund Interest Rate:

Mutual funds’ interest rates depend on stock exchange volatility. The minimum and maximum interests depend on the stock value of a company allocated.

Some of the companies with good interest rates for 3 years:

HDFC midcap opportunities fund- 16.99%

ICICI private discovery fund-8.24%

L&T India -16.44%

And brokerages depend on our returns.

High returns on mutual funds :

  • For good return in mutual funds, invest in equities like large cap, midcap, small-cap

Value funds and index funds.

  • For lower risk and better return invest in income funds, market mutual funds, and ultra short-term funds. etc

High returns get higher risks in mutual funds. Invest systematically to get better returns.

What is a Long-Term Investment?

Long-term investment means investors hold their investments in assets for more than 3 to 5 years. Due to long-term investment, they get more risk but returnss are highly profitable in stocks, real estate, mutual funds..etc.

Safe investment with high returns

Safe investments like mutual funds, Sip, and market MF are safe and lower risk for higher returns.

Tips for a safe investment with high returns:

  • Maintain good portfolio
  • Invest in short and ultra-short-term funds
  • Invest under professional traders
  • Calculate lump sum investments
  • Invest in lower-risk stocks, real estate..etc
  • Invest in liquid funds.

Frequently Asked Questions

How to invest in mutual funds in India?

We can buy mutual funds directly through banking platforms/apps or mutual fund companies with an open demat account giving the required details.To invest in mutual funds,we need to check, if the company shares are profitable or not,Analysis of volatility stock exchange, type of investors,funds invested in companies etc. These are the major things to invest in MF.

What are Index funds?

Index funds mean the top 50 companies listed in nifty with higher profits and good returns.

Which is the best mutual fund for the long term?

  • Aditya Birla Sun Life Digital India Funds Direct Growth.
  • SBI Technologies’ fund direct growth
  • Quant Infrastructure funds Hi direct growth
  • Axis small cap fund

How to choose the best mutual fund?

  • Choose mutual with high profits
  • Buy shares with lower prices
  • Check the volatility graph of the past 3 years.

How to select the best mutual fund ?

  • Choose mutual with lower risk
  • Checklist the top investors’ share percentages in mutual funds, you have to buy
  • Calculate average percentage returns.

What are index funds in India ?

  • Hdfc banks
  • Idfc banks
  • Icici prudential funds
  • Axis nifty100
  • Larsen and Toubro
  • SBI Mutual fund

What is the best mutual fund to invest?

Aditya Birla sun life digital India direct growth plan.

Quant infrastructures


Axis small-cap funds

Which is the best mutual fund sip?

Nippon India growth direct plan fund

ICICI Prudential multi-cap fund direct plan growth

SBI Bluechip fund direct growth

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