Beginners Guide to Mutual Funds

Introduction

Mutual funds are one of the most popular ways for people in India to invest money for future goals like buying a house, saving for retirement, or growing wealth. A mutual fund brings together money from many investors and a professional team manages that money by investing it into different assets such as stocks, bonds or other financial instruments. The idea is that rather than choosing individual stocks or bonds yourself, you can invest in a mutual fund and benefit from diversification, professional management and regulated transparency. Motilal Oswal Mutual Fund is a well-known mutual fund provider in India that offers a wide range of schemes including equity, index, hybrid and sector-based funds designed to match different investor goals and risk levels.

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What Are Mutual Funds?

A mutual fund is a financial product that collects money from many investors and invests that pooled money in a mix of stocks, bonds or other securities. Each investor owns units in the fund in proportion to how much they invested. The total value of these units changes with the market value of the assets the fund holds. Mutual funds are managed by professional fund managers who make investment decisions according to the fund’s objective.

How Do Mutual Funds Work?

• Pooling Money: Many investors put money into the mutual fund.
• Professional Management: Fund managers invest this pooled money in a diversified set of assets.
• Unit Allocation: Investors receive units of the mutual fund based on their contribution.
• NAV Update: The Net Asset Value (NAV) of the fund units is calculated daily based on market performance.

This setup allows investors to benefit from diversification and professional decision-making without needing to pick each investment themselves.

Why Invest in Mutual Funds

Mutual funds offer several advantages:

• Diversification: Your money gets spread across many assets, reducing the impact of a single investment performing poorly.
• Professional Management: Fund managers make investment decisions based on research and expertise.
• Accessibility: Most funds allow starting with small amounts like ₹500.
• Flexibility: You can invest via SIP (Systematic Investment Plan) or a one-time lump sum.
• Regular Updates: NAV and portfolio details are updated and published frequently.

Types of Mutual Funds

Mutual funds are broadly classified by what they invest in:

Equity Funds

These invest in stocks and aim for long-term growth but involve higher risk.
Examples include Motilal Oswal Large & Midcap Fund, Midcap Fund and Flexi Cap Fund.

Index & ETF Funds

These track a market index like the Nifty 50, meaning they aim to mimic the performance of a whole market segment.

Hybrid Funds

These mix equity and debt to balance growth and risk. They are suitable for moderate risk-takers.

Debt Funds

These invest in fixed-income securities like bonds and aim for income and stability.

Tax-Saving Funds (ELSS)

These ELSS equity-linked funds offer tax benefits under Section 80C of the Income Tax Act and typically have a lock-in period.

Motilal Oswal Mutual Fund Overview

Motilal Oswal Asset Management Company Ltd. (MOAMC) is the mutual fund division of Motilal Oswal Financial Services. It was incorporated in 2008 and has grown to offer many schemes across equity, hybrid and passive categories.

Motilal Oswal Mutual Fund manages a wide range of schemes   including index funds, sector ETFs and active equity products  catering to different investment goals and risk profiles. There are active and passive funds in categories like large cap, mid cap, small cap, thematic and balanced advantage.

Key Motilal Oswal Mutual Fund Schemes

Here are some notable schemes available in 2026:

Scheme Name

Category

Investment Focus

Notes

Large & Midcap Fund

Equity

Large + mid-cap stocks

Popular diversified equity option.

Midcap Fund

Equity

Mid-cap stocks

Strong growth potential.

Flexi Cap Fund

Equity

All market caps

Flexible allocation across caps.

Nifty 50 Index Fund

Index

Tracks Nifty 50

Low cost, broad market exposure.

Nifty Midcap 150 Index Fund

Index

Mid-cap index

Captures mid-segment performance.

Small Cap Fund

Equity

Small-cap stocks

Higher potential growth & risk.

ELSS Tax Saver Fund

Equity (Tax-Saving)

Tax benefits + growth

Lock-in applies for tax savings.

How to Invest in Mutual Funds

Investing in mutual funds is straightforward:

1. Complete KYC: Submit basic identity and address documents.

2. Choose Funds: Decide which schemes fit your goals and risk level.

3. Choose Investment Mode:

   • SIP for periodic investing,
   • Lump sum for one-time investing.

4. Make Payment: Use UPI or net banking.

5. Track Performance: Monitor NAV and returns over time.

Important Terms You Should Know

• Net Asset Value (NAV): The per-unit price of a mutual fund, updated daily.
• SIP (Systematic Investment Plan): Method to invest fixed amounts regularly.
• AUM (Assets Under Management): Helps show the size of a mutual fund.
• Exit Load: Fee charged if you redeem before a specified time.
• Benchmark: Standard index used to compare performance, e.g., Nifty 50.

Mutual funds are an effective way for individuals to participate in financial markets whether the goal is wealth growth, tax savings, income stability or long-term planning. By pooling money and investing in a diversified portfolio, mutual funds help balance risk and return while leveraging professional management. Motilal Oswal Mutual Fund is among the active fund houses in India, offering a broad range of schemes across equity, index, hybrid and sectoral categories that suit varying investor profiles. Knowing the basics, key types of mutual funds and practical steps to invest can help you begin your investment journey with confidence and clarity.