What is a mutual fund?
A mutual fund pools your money along with that of several other investors and invests this money, depending on the type of mutual fund you choose. It invests in different stocks if you choose equity or equity diversified mutual funds, in bonds or fixed income securities, if you choose debt mutual funds and a mix of equity and debt if you choose a balanced mutual fund.
The Company which manages the mutual fund is called an AMC or an asset management Company. An AMC may manage several mutual fund schemes.
The money you and several investors invest in the mutual fund, is managed by a professional called a fund manager, appointed by the AMC. Fees are paid to the fund manager for managing your money, which is deducted from the money, you invest in the mutual fund.
The activities of the AMC are regulated by SEBI (The Securities and Exchange Board of India).
You have to pay money when you enter and exit a mutual fund scheme, called the entry load and exit load.