By mutual funds, we mean funds or schemes which invest in the market to earn return for unit holders or shareholders of the fund. You can purchase mutual fund units in any scheme and this indicates your share of the holdings in the same. They may be bought or redeemed/sold whenever you require and this is done at the existing NAV (net asset value) of the fund at the time. These values keep changing, based on the holdings, market performance, etc.
A mutual fund is an investment scheme that is managed professionally, usually by an AMC (Asset Management Company), bringing groups of investors together for investing in market securities including bonds and stocks. All these funds have SEBI registration and operate within the regulations created for safeguarding investor interests. The main advantage here is that investors can diversify and spread out their portfolios while minimizing risks as a result. They can invest in different funds with varying ratios, and across diverse market sectors. They can participate in wealth-building without investing a large sum at one go. They can comfortably invest smaller amounts every month and build wealth for the future. However, mutual funds are subject to market risks and volatility, especially in terms of the erosion of the investment value.
There are real estate mutual funds or REMFs available in the market. These are funds investing in securities of real estate firms in the market. Most of these funds are deployed for corporate/commercial property along with agricultural, industrial, retail, and residential properties. Real estate funds may indirectly or directly deploy investments in real estate. Smaller investors may participate in these funds instead of having to invest lump sum amounts in buying real estate. The rate of return depends on various market conditions, performance and appreciation of these assets, their income-earning potential, etc. While there are sizable risks associated with these investments, they do offer more flexibility and liquidity for individual investors.
