What are Mutual Funds?
Mutual funds are professionally-managed investment scheme which is managed by an asset management company like HDFC, ICICI, Kotak who brings group of investors together and invests their money in Bonds, Stocks, Gold and other securities.
Equity Mutual Funds : An equityfundbasically invests in stocks. It can be actively or passively managed. Suitable for investor whose has higher risk appetite and looking for high returns. Suitable for long term investment horizon, ideally 7-10 years minimum.
Debt mutual funds invest in various fixed income instruments like bank Certificates of Deposits (CDs), Commercial Papers (CPs), treasury bills, government bonds (G-secs), PSU bonds and corporate bonds/debentures, cash and call instruments, and so on.A debt fund may invest in short-term or long-term bonds, money market instruments or floating rate debt.