Are mutual funds more risky than stocks?

Since they have direct investments in the equity market, both investors often take on risk. However, mutual funds are a safer investment than stocks since their portfolios are highly diversified and professionally managed, which reduces the risk that comes from individual equities.

How to reduce risk in mutual funds?

Using the technique of diversification, which means divide and rule helps us to balance our portfolio. It divides the assets into various different sectors that increase the chances of capital gain.

What is the relation between risk and return?

This works on the formula of greater the price, greater will be the returns. More risky the fund is, more chances are there of its potential growth.

Which category of fund has lower risks?

Although, each and every fund has its own risk factor. The large-cap funds have lesser risk probability. As they hold a strong presence in the market the risk percentage is lower than other categories.