One of the major advantages of mutual funds is that of diversification. By investing a small sum of money, the investor can ensure that they get access to a lot of holdings indirectly, which is something that would never have been possible with direct investments.
How a particular mutual fund scheme manages diversification determines the benefits that come to the investor in this area. There are several steps that are taken both from the side of the regulator as well as from the mutual funds to ensure that the situation remains in check.
Text: By Arnav Pandya
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Also see: Don't get carried away by forecasts