Explain the various risks involved in investing in mutual funds.

The following events may result into non- satisfactory performance of Mutual Funds: Excessive diversifications of portfolio, losing focus on the securities of the key segments; Too much connection on blue-chip securities; Poor planning of investment returns; Un-researched forecast on income, profits and government policies; Fund managers being unaccountable for poor results; Failure to identify clearly the risk of the scheme as distinct from risk of the market; Under performance in comparison to peers; Necessity to effect high turnover through liquidation of portfolio resulting in large payments of brokerage and commission.