A mutual fund is a professionally managed company that collects money from many investors and invests it in securities such as stocks, bonds and short-term debt, equity or bond funds and money market funds.
Mutual funds are a good investment for investors looking to diversify their portfolio. Instead of betting everything on one company or sector, a mutual fund invests in different stocks to try to minimize portfolio risk.
The term is typically used in the US, Canada and India, while similar structures around the world include the SICAV in Europe and the open-ended investment firm in the UK.
Money is not blocked, it is invested in investment funds
In mutual funds, money is not blocked. Get invested!
“When investing in mutual funds, one of the most common questions is: ‘Is my money locked up?'”
It is important to note two facts:
a. In a mutual fund scheme, the money is invested and not locked, and the money always remains yours. It is simply managed by a professional fund manager.
b. Your money is always easily accessible. The structure of a mutual fund ensures the flexibility to access it. You can redeem your investment partially or entirely. You can also pre-specify repayment dates, giving permanent instructions to the mutual fund company to transfer a fixed amount to your bank account on a specified date each month or quarter, of your choice. You can also choose to transfer your investment from one mutual fund scheme to another managed by the same mutual fund company. And you always get a complete/easy-to-understand statement that documents it neatly.
Go ahead and invest in a mutual fund scheme of your choice and enjoy the flexibility, transparency and liquidity. In other words, a superior investment experience, while being in the care of professional managers.