Mutual funds are a popular investment option for those who want to diversify their portfolio without managing individual stocks or bonds. A mutual fund pools money from many investors to buy a diversified selection of stocks, bonds, or other assets, managed by professional fund managers.

When choosing a mutual fund, start by considering your investment goals. Are you investing for long-term growth, income, or capital preservation? Different types of mutual funds cater to different needs. Equity funds invest in stocks and aim for growth, while bond funds focus on generating income.

It’s also important to look at the fund’s performance, but past performance doesn’t guarantee future results. Pay attention to the fund’s expense ratio as well—this is the annual fee the fund charges, and lower fees typically result in better returns over time.

Lastly, assess the level of risk you’re comfortable with. Some funds are more volatile than others, so choose one that matches your risk tolerance and aligns with your investment timeline.