What are mutual funds and its types?

Question

Accepted Answer

Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities.

Mutual funds are managed by professional fund managers.
They offer investors the opportunity to invest in a diversified portfolio of stocks, bonds, and other securities.
There are different types of mutual funds such as equity funds, debt funds, balanced funds, index funds, and sector funds.
Equity funds invest primarily in stocks, while debt funds invest in fixed-income securities like bonds.
Balanced funds invest in a mix of stocks and bonds, while index funds track a specific market index like the S&P 500.
Sector funds invest in a specific sector of the economy like technology or healthcare.
Investors can choose mutual funds based on their investment goals, risk tolerance, and time horizon.

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