Some of the risks involved in investing in Mutual Funds

• Mutual funds and securities are subject to market risks and there is no assurance and no guarantee that the objectives of the mutual fund will be achieved.

• The NAV of the units issued under the scheme may go up or down depending on the factors and forces affecting capital markets.

• Past performance of the Mutual fund does not indicate the future performance of the schemes of the Mutual Fund.

• Investors in the scheme are not guaranteed of any assured returns.

 

Equity Funds are exposed to market risk i.e. there is a possibility that the price of the stocks in which the Fund has invested could decrease. Of course, the prices may also increase, making it possible for the fund to earn profits.

Debts Funds are exposed to two main risks:

 

1.Credit Risk

The company in whose bonds the fund has invested could default on the payment of its interest or principal.

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2.Interest Rate Risk​

       The price of the bond in which the Fund has invested may decrease because of an increase in the interest rates. In general, it is useful to remember that this is a "see-saw" relationship - bond prices (and therefore, NAVs) increase when interest rates decrease and vice versa.