What is a Mutual Fund?

What is a Mutual Fund?

A mutual fund is an investment vehicle that pools money from multiple investors and invests it in a diversified portfolio of stocks, bonds, or other assets. The fund is managed by professional fund managers, and investors earn returns based on the fund’s performance.

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    • How are mutual fund returns taxed?

      Equity Mutual Funds: Short-Term Capital Gains (STCG): 15% (if held for less than 1 year). Long-Term Capital Gains (LTCG): 10% (if gains exceed ₹1 lakh in a financial year). Debt Mutual Funds: Taxed as per individual tax slab (if held for less than 3 ...

    • What is the difference between Direct and Regular Mutual Funds?

      Direct Plan: Investors buy mutual funds directly from the fund house, avoiding distributor commissions and resulting in lower costs and higher returns. Regular Plan: Investors buy mutual funds through brokers or distributors, leading to slightly ...

    • What is NAV (Net Asset Value)?

      NAV is the per-unit price of a mutual fund scheme, calculated as the total value of assets minus liabilities divided by the number of outstanding units. It changes daily based on market fluctuations.

    • What is an Expense Ratio?

      The expense ratio represents the annual fee charged by the mutual fund for management and operational expenses. It is expressed as a percentage of the total assets under management (AUM). Lower expense ratios lead to higher returns.

    • What is an ELSS (Equity Linked Savings Scheme)?

      ELSS is a tax-saving mutual fund that allows investors to claim tax deductions of up to ₹1.5 lakh under Section 80C. It has a lock-in period of 3 years, the shortest among all tax-saving options.