BENGALURU: If you are an investor in Mutual Fund for the last 10 years then you will know the risk, facts and misconceptions related to mutual funds. To benefit from your investments, you need to clear half-baked truth offered from various sources and get your facts straightened out, according to scripbox.com.

Following is the list of such misconceptions which any investor will ask before investing in a mutual fund scheme.

Misconception 1: Mutual Fund = Equity.

Fact: - Mutual Funds are not only about investing in stocks and equity market, but it’s much more than that. Equity Mutual Funds are not only to invest in equities but can also be invested in debt. SEBI rule states that 65 percent of the assets should be in equities for a scheme to be classified as equity. Mutual funds are typically classified based on the underlying asset classes that they are invested in such as equity mutual funds (investment mostly in equities), debt mutual funds (investment in mostly debt or fixed income) and money market funds (investment in instruments such as treasury bills and repurchase agreements).

Misconception 2: Mutual fund schemes designed for children will secure your child’s future.

Fact: - There are no such schemes that can guarantee returns and same goes for children too. We have a general understanding that ‘investing is a long term venture’ but there will be risks in any fund you invest in. Like any other fund scheme, returns are based on only market performance. A child focused fund also carries the same risk as a normal mutual fund.

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