Mutual funds in India

 Mutual funds in India are a type of investment fund, which is a pool of money managed by a professional fund manager. The primary objective of these funds is to generate returns on capital that are higher than the market rate of return. There are two types of mutual funds in India: open-ended and close-ended funds.


Open-ended funds are allowed to invest in any asset class, including stocks, bonds, real estate and commodities. These funds can also invest in other open-end funds or separately managed accounts (SMA) that invest in other asset classes. However, they cannot invest in debt instruments or derivatives such as options contracts or futures contracts.


Close-ended funds are restricted to investing in one class of assets only — equity shares or debt securities issued by companies listed on Indian stock exchanges. In this case, these funds do not have any leverage and hence do not require additional capital from investors as it is backed by their shareholding value only.


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