The investors find themselves in confused stage where they do not know if the information they have about stock market is correct. In such situation mutual funds guide the investors about how they can invest in stock market with less risk . Mutual funds are considered by individual investors as financial institutions who have qualified and professional fund managers who have the accurate know how, identify investment opportunities, formulate investment approach, invest funds and monitor progress accurately and economically. The accomplishment of any Mutual Funds is dependent on good work of fund manager and informed investor. The concept of Mutual Funds has been on the financial framework for long period of time. In year 1963 Mutual funds began with the formation of Unit Trust of India at the initiative of the Government of India and Reserve Bank of India. The launch of innovative schemes in India has happened very slowly due to the investment perspective of the people and non availability of infrastructure to promote the schemes. Risk adverse investors are keen to have capital protected investments with steady returns. Thus bank deposits, post office deposits and gold are always preferred by investors. For many years funds were more of a service than a product, the service being professional investment management. In the last 15 years, the Mutual Funds have evolved to be a investment product that can deliver safety and attractive returns . The innovations in Indian financial industry today offers range of products that are simple to complex and the investors who range from middleclass to high net worth individuals. One of the important financial innovations of the mutual fund is a middle class can now invest in the share markets which were previously dominated by the rich and