How are mutual funds different from shares?

Answer 1

Simplest answer. Mutual funds are pools of shares of individual stocks. Each mutual fund usually has at least 100 stocks in it.

Some people say buy mutual funds for their diversity and safety, but many people, they're wrong.

Anyways, hope that helps!

Answer 2

The difference is that in mutual funds you purchase the units in the Mutual Funds even in small units, while the Fund manager, as your trustee, with the assistance of the experts in the field, invest the fund generated from out the investment made by persons like you, in various companies by purchasing shares; shares are the units of a company which you may purchase yourself directly.

Answer 3

When you buy a stock [shares], you have made a decision based on whatever criteria that you have used for selection - that you want to own that specific company. You can buy a number of different of stocks in different sectors and create your own stock portfolio. For instance maybe you would like to own 5 stocks - energy stock | internet stock | retail stock | bank stock | drug stock.

When you buy a mutual fund - your selection criteria becomes different - you are now making a decision based on things like the specific fund type, the fund manager, the fund historical record - BUT you have nothing to do with the actual selection of the stocks that are in the fund. This is actually why an individual selects mutual funds instead of individual stocks, besides the cost involved with buying enough stocks to have a well diversified portfolio - they also don't have the knowledge or expertise to do so, they count on the fund manager for doing that.

Answer 4

Individuals or say Common People invest in Shares or Securities of a company in Primary or Secondary markets. But many times it happens that small investors are not educated enough to know the technicalities of share market. or don't have the resources to hire services of a professional Stock Analyst. Mutual Funds try to solve this difficulty of small investors. MFs collect small amount of savings from general public through various schemes and than invests it in shares, bonds and other securities issued by Company or say Government. As they collect small amount of money from tens and thousands of investors eventually it becomes a huge sum through which they can use the services of Professional Stock Analysts and can also get better bargains then an individual Investor. There are different type of Mutual Funds and different types of schemes of MFs but the main point is that they are risk free as compared to investing directly in the Stock Market.

Answer 5

Mutual Fund are of two type
1. Equity based
2. Debt based
Equity based Mutual Funds are fund in which Fund manager invest in share market. But it differ from shares in terms of risk.
in Mutual Fund your money put in diffrent stocks of the market which can't be possible through direct investment in share market, so its diversefication of risk.

Secondely You can take experties views through Fund manager as his work is only analysis of the market and the socks etc.. which can't be possible through direct investing.

And from the last records Mutual Funds gives more returens from the benchmark like NSE or BSE etc..
Mahesh Kaushik
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Answer 6

Simple answer:

Shares of stock represent ownership in one company, and your investment will rise or fall with the prospects of the company

With a mutual fund you have a partial investment in a large pool of many stocks. Those stocks are chosen by the fund's 'portfolio manager' who generally follows a specific strategy in selecting the stocks for the portfolio (might be large cap, might be small cap, might be technology, etc.)

One is diversified (a fund); one is not (a stock). You might make or lose a bundle on either.

Answer 7

Mutual Funds - in it u bought units of a fund under a certain scheme. the asset management company with highly qualified persons manage the fund investments in debt and equity instruments. debt instruments bear no risk but a limited profit in shape of interest. whereas equity (investment in stock markets) are highly risky investments. which may gave higher profits and losses as well.
Shares- it is highly risky investment avenue. it may gave more than 100% returns and also can give high losses. for a small investor mutual fund is safer than direct expo user in the stock market

Answer 8

shares _RISK
mutual fund _SEMI RISK

Answer 9

u dont pay the equity on shares