Mutual Funds — Investment Vehicles: Complete 101 Guide#
Last updated: March 2026
What are Mutual Funds?#
Mutual funds pool money from multiple investors to invest in securities (stocks, bonds, money market instruments) managed by professional fund managers.
Key Entities#
| Entity | Role |
|---|
| AMC | Asset Management Company |
| Trustee | Investor protection |
| Custodian | Safekeeping of assets |
| RTA | Transaction processing |
Types of Mutual Funds#
By Asset Class#
| Type | Risk | Example |
|---|
| Equity | High | Smallcap, Largecap |
| Debt | Low | Corporate bonds, Gilt |
| Hybrid | Medium | Balanced funds |
| Money Market | Low | Liquid funds |
By Structure#
- Open-ended: Buy/sell anytime
- Closed-ended: Fixed tenure
- Interval: Limited trading periods
How to Invest#
SIP vs Lump Sum#
| Mode | Benefit |
|---|
| SIP | Rupee cost averaging |
| Lump Sum | Market timing |
SEBI Regulations#
- Total Expense Ratio (TER) caps
- Risk profiling requirement
- Standard terminology
- Investor grievance mechanism
Consumer Rights#
- Transparent fee structure
- Portfolio disclosure
- Redemption within 3 business days
- SEBI grievance portal access