A mutual fund is nothing more than a collection of stocks and/or bonds. Looking back, mutual fund have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of important financial investments. In fact, to many people, investing means buying mutual fund. After all, it’s a common knowledge that investing in mutual fund is (or at least should be) better than simply letting your cash lying idle in a savings account or simply waste away.Through mutual fund we can create wealth and also forgo the market risk factor by a technique called ‘averaging’ which can be achieved through Systematic Investment plan (SIP) and Systematic Transfer Plan (STP).