A Mutual Fund scheme is a type of financial instrument which is made by a pool of money collected from many investors. The AMCs invest in securities like company shares, bonds, stocks, debts, and other assets by mutual fund companies. The AMCs manage these open-ended investments. Mutual fund companies allocate the fund in different securities. This helps its investors to grow their wealth through their investments.

                              The capital gain on a Mutual Fund scheme depends on the performance of the securities it decides to buy. The market condition is also a factor that determines the value of the particular security purchased.

                  The income or gain generated from these investments is then distributed among the investors. The distribution is done post deduction of certain expenses, by calculating the Net Asset Value of the scheme. Mutual Funds can be a higher risk investment but the returns are generally greater than in any other investment plan.