Get The Commerce Funds - Commerce Bank

Mutual funds are largely a safe investment, seen as being a good way for investors to diversify with minimal risk. But there are circumstances in which a mutual fund is not a good choice for a market participant, especially when it comes to fees.

Most mutual funds fall into one of four main categories – money market funds, bond funds, stock funds, and target date funds. Each type has different features, risks, and rewards. Money market funds have relatively low risks.

Mutual funds let you pool your money with other investors to "mutually" buy stocks, bonds, and other investments. They're run by professional money managers who decide which securities to buy (stocks, bonds, etc.) and when to sell them. You get exposure to all the investments in the fund and any income they generate.

Mutual fund returns can come from several sources: Appreciation in the fund's NAV, which happens if the fund's investments increase in price while you own the fund. Income earned from dividends on stocks or interest on bonds. Capital gains or profits incurred when the fund sells investments that have increased in price.

Mutual funds1-year return (%)Kotak Multicap Fund39.77Motilal Oswal Large and Midcap Fund38.05ITI Multi Cap Fund38.54Nippon India Multi Cap Fund38.136 more rows • 1 day ago

A mutual fund is a pool of money collected from investors that is then invested in securities such as stocks or bonds. Each share in the fund represents a proportional interest in the fund's portfolio, so the more shares you own, the larger your interest in the fund.

Mutual funds are required to pass on all net income to shareholders in the form of dividend payments, including interest earned by debt securities like corporate and government bonds, Treasury bills, and Treasury notes. A bond typically pays a fixed interest rate each year, called the coupon payment.

Access to different markets You might also need an investment to serve a specific role in your portfolio, such as generating income or adding stability during periods of market duress. Mutual funds can provide access to many different parts of the market, even within the broad asset classes of stocks and bonds.