A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets. It is managed by professional fund managers to generate returns based on market performance.

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Types of Mutual Funds:
 

1. Equity Funds – Invest primarily in stocks for long-term growth.

2. Debt Funds – Invest in bonds and fixed-income securities for stability.

3. Hybrid Funds – A mix of equity and debt for balanced risk and returns.

4. ELSS (Tax-Saving Funds) – Provide tax benefits under Section 80C.

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Benefits of Mutual Funds:

✔ Diversification – Reduces risk by investing in multiple assets.
✔ Professional Management – Expert fund managers handle investments.
✔ Liquidity – Easy to buy and sell.
✔ Flexible Investment Options – SIP (Systematic Investment Plan) or lump sum.