Mutual Funds & Capital Market

Mutual Funds are collective investments which gather money from different investors to invest in stocks, short-term money market financial instruments, bonds and other securities and distribute the proceeds as dividends. Mutual funds give small or individual investors access to diversified, professionally managed portfolios.

Most mutual funds fall into one of four main categories –

• Money Market Funds
• Bond Mutual Funds
• Stock Mutual Funds
• Target Date Funds
• Balanced Mutual Funds

Capital Markets refer to the venues where funds are exchanged between suppliers and those who seek capital for their own use. Capital markets are used to sell different financial instruments, including equities and debt securities.

Capital market includes:

• Stock Market
• Bond Market
• Currency Markets

Mutual funds have a significant role in channelizing savings in to the capital market. A mutual fund is a corporation that attracts savings. Which are then invested in money market debt market and capital market instruments such as shares & debentures.