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By buying a mutual fund, we are buying a number of stocks that are bought/sold by the fund manager.

Let us say you have invested Rs. 10,000/- in a XYZ mutual fund and he has stocks of the below 4 companies in a ratio

A - 15%

B - 30%

C - 25%

D - 30%

Which effectively means you have bought shares of company A worth Rs. 1500, B worth Rs. 3000/- and so on.

While buying stocks, you have a control on what you buy and when you buy and how much you buy but in the case of MFs you do not have this control. Whatever the fund manager buys, comes into your portfolio.

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16y ago

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