These funds invest in a mix of equities and fixed income securities. They try to balance the aim of achieving higher returns against the risk of losing money. Most of these funds follow a formula to split money among the different types of investments. They tend to have more risk than fixed income funds, but less risk than pure equity funds. Aggressive funds hold more equities and fewer bonds, while conservative funds hold fewer equities relative to bonds.
ADVANTAGES OF MUTUAL FUNDS:
✔ Professional Management: There are a lot of reasons people prefer to choose mutual funds as their investment solutions. Mutual fund is a professional management of the investor’s money.
✔ Expert Management with Low Risk: One of the main reasons people prefer to go for the investment solutions because they do not have enough expertise or time when it comes to managing their portfolio. Mutual fund is a professional management of their money without putting it at a lot of risk.
✔ Diversification of Investment: The fear of losing their money always overpower the idea of gaining something, which is why people are not a huge fan of putting all eggs in same basket. The mutual fund is an easy way to go for the diversity and risk of not losing everything.
✔ Mutual Funds’ Investments Spread Out Risk: When you are investing in a pool and there are several other investors involved in it, the risk is usually evenly spread out. Mutual funds allow you to invest your heart’s desired money so that the loss is actually minimized.