Mutual Funds for Beginners: How to Build a Portfolio

What is a Mutual Fund?

A mutual fund pools money from multiple investors to buy a diversified portfolio of stocks, bonds, or other securities, managed by professional fund managers.

Types of Mutual Funds

- Equity Funds: Invest in shares of listed companies, offering high returns with market risks.

- Debt Funds: Invest in corporate bonds and government securities, offering stable, low-risk returns.

- Hybrid Funds: Invest in a mix of both equity and debt to balance risk and return.

Asset Allocation for Beginners

Assess your risk appetite and investment horizon. Allocate a higher portion to equity for long-term goals (5+ years) and debt for short-term goals (under 3 years).