Mutual Fund is a financial instrument where the money is collected from various investors and is invested in share market, bonds, money market instruments, and many other assets. Each Mutual Fund has its own goals and investment plan and it is stated in the prospectus.
One can easily diversify his portfolio by putting his money into mutual fund as the asset allocation would take in different instruments under its umbrella. These Mutual Funds are run by Asset Management Companies (AMCs) and are managed by professional Fund Managers.
There are many AMCs in the market like SBI, Tata, Franklin, Aditya Birla etc. All of them have their respective mutual fund schemes. The price of a Mutual Fund unit can be referred to as NAV (Net Asset Value). The NAV of any mutual fund is ascertained by dividing the total worth of assets in the Mutual Fund’s portfolio, minus the liabilities.