Mutual fund, explained
A mutual fund pools money from many investors and a professional fund manager invests it in a diversified basket of stocks, bonds or other assets. You own units of the fund, priced at its NAV, and share in the gains and risks proportionally.
Types of mutual funds
Funds are grouped by what they invest in.
- Equity — mainly stocks, for long-term growth (large/mid/small cap, ELSS, sectoral).
- Debt — bonds and money-market instruments, for steadier returns.
- Hybrid — a mix of equity and debt.
- Index funds — passively track an index at low cost.
Direct vs regular, SIP vs lumpsum
A direct plan has a lower expense ratio (no commission) than a regular plan, so it grows faster. You can invest a lumpsum or automate a SIP.
How to invest
Open a free account on ROAR, complete KYC, pick a fund that matches your goal and risk, and invest commission-free in direct plans. New to funds? Start with our mutual funds for beginners guide.
Frequently asked questions
How does a mutual fund work?
It pools money from many investors; a fund manager invests it in a diversified portfolio. You own units priced at the fund’s NAV and share in the returns and risk.
Are mutual funds safe?
They are regulated by SEBI and professionally managed, but they are market-linked — returns are not guaranteed and values can fall. Risk varies by fund type (debt is generally lower-risk than equity).
How much do I need to start?
You can start a SIP from as little as ₹500 a month, or invest a lumpsum. Direct plans are commission-free on ROAR.