Do Mutual Funds invest only in stocks?

Mutual funds can invest in a variety of assets, not just stocks. While stocks and mutual funds are popular and commonly known, mutual funds can also invest in bonds, money market instruments, real estate, and other types of assets.

Stock mutual funds, as the name implies, invest primarily in stocks of publicly traded companies. However, there are different types of stock mutual funds, such as growth funds, value funds, index funds, sector funds, and international funds, which have different investment objectives and strategies.

Bond mutual funds, on the other hand, invest primarily in bonds issued by governments, corporations, and other entities. Bond mutual funds may also invest in other fixed-income securities, such as Treasury bills, certificates of deposit, and commercial paper.

Money market mutual funds invest in short-term, low-risk debt securities, such as government bonds, corporate commercial paper, and certificates of deposit.

Real estate mutual funds, or REITs (real estate investment trusts), invest in properties or mortgages related to real estate.

Therefore, mutual funds can invest in a diverse range of assets, depending on the fund's objectives and investment strategy. It's important to read the mutual fund's prospectus and understand the fund's investment strategy before investing.