The market is not short of critics of mutual fund industry. As an informed investor, it is essential that you know both sides of the coin before you make a decision on whether mutual funds are right for you or not.

A fund's level of risk is decided by the kind of investments a fund chooses. Some mutual funds, for example equity funds, are more risky than others. A mutual fund is neither insured nor guaranteed even if it is sold by a bank.

Some of the risks that may possibly occur when investing in mutual funds are as follows: